LLP Compliance in India – Complete Guide

1. What is an LLP?

LLP (Limited Liability Partnership) is a hybrid structure combining features of:

• Partnership: Flexible internal management

• Company: Limited liability for partners

Legal Basis:

• LLP Act, 2008

• Companies Act, 2013 (as applicable)

• Income Tax Act, GST Act, and other applicable laws

Key Features:

• Minimum 2 partners required

• No maximum limit on partners

• Separate legal entity from partners

• Limited liability: Partners liable only to the extent of their contribution

2. Annual LLP Compliance

Advisory: Form 11 and Form 8 are filed online with MCA portal using DSC (Digital Signature Certificate).

3. Event-Based LLP Compliance

Advisory: All forms require Digital Signature of designated partner and timely filing to avoid penalties.

4. Documents Required for LLP Compliance

1. LLP Agreement (filed and updated with ROC)

2. PAN & TAN of LLP

3. Bank statements and financial statements

4. Partner details – PAN, address, consent

5. Address proof of LLP office

6. DSC of designated partners

5. Financial & Accounting Compliance

• LLP must maintain proper books of accounts

• Prepare Statement of Accounts & Solvency (Form 8) annually

• LLP is required to have accounts audited if:

  • Annual turnover > ₹40 lakh OR

  • Contribution > ₹25 lakh

• Audit conducted by chartered accountant

6. Tax Compliance

• Income Tax: LLP files ITR 5

• TDS Compliance: Deduct and deposit TDS if paying salaries, contractor fees, rent, or professional fees

• GST Compliance: Register if turnover > ₹20 lakh (₹10 lakh for NE states) or for inter-state supply

• Advance Tax: Pay quarterly if tax liability exceeds ₹10,000

7. LLP Compliance Deadlines – Summary

Penalty for late filing:

• Form 11 / 8 – ₹100 per day

• TDS / GST – As per applicable laws

8. Penalties for Non-Compliance

9. Advisory Notes for LLP Partners

1. Maintain updated LLP agreement

2. Ensure timely filing of Form 11 & Form 8

3. Maintain accurate books and financial statements

4. File Income Tax, GST, and TDS as per schedule

5. Update ROC for all changes in partners, capital, or address

6. Conduct audit if turnover/contribution threshold exceeded

7. Keep records and digital signatures ready for filings

8. Implement internal checks to avoid penalties

10. Advanced / Additional LLP Compliance Information

1. LLP Audit Threshold:

   • Mandatory if turnover > ₹40 lakh OR contribution > ₹25 lakh

2. Foreign Contribution & Foreign Partners:

   • LLP receiving foreign funds must comply with FCRA (if NGO)

   • Update foreign partner details in Form 11 / 8

3. Change in Capital Contribution:

   • File Form 2 for addition/removal of partner contribution

4. Digital Compliance:

   • Filing via MCA portal using DSC

   • Keep soft and physical copies of all filings

5. Internal Advisory:

   • Maintain reminder calendar for all ROC, tax, and TDS filings

   • Regular audit and internal review reduces risk of penalties and legal notices

✅ Summary: Key LLP Compliance Checklist

• Annual Return – Form 11

• Statement of Accounts & Solvency – Form 8

• Income Tax Return – ITR 5

• TDS compliance – deduct & file quarterly

• GST compliance – monthly / quarterly

• Audit if threshold exceeded

• Update ROC forms for partner / capital / office changes

• Maintain LLP agreement & all records

LLP Compliance – Additional & Advanced Information

1. Event-Based Compliance (Beyond Annual Filings)

Note: All forms require Digital Signature Certificate (DSC) of designated partners.

2. Financial & Audit Compliance – Detailed

1. Books of Accounts:

   • Must be maintained at registered office

   • Record all receipts, payments, assets, and liabilities

2. Audit Requirement:

   • Mandatory if:

     • Turnover > ₹40 lakh, OR

     • Capital Contribution > ₹25 lakh

   • Conducted by Chartered Accountant

   • Auditor must submit audit report in Form 8

3. Financial Statements:

   • Must include Balance Sheet, P&L Account, Partners’ Contribution & Solvency Statement

3. Tax Compliance – Detailed

1. Income Tax:

   • LLP files ITR-5 annually

   • Partners report share of profits in personal ITR

2. TDS Compliance:

   • Deduct TDS on contractor payments, professional fees, rent, or salaries

   • File Form 26Q / 24Q / 27Q

3. GST Compliance:

   • Register if turnover exceeds ₹20 lakh (₹10 lakh for NE states)

   • File GSTR-1, GSTR-3B, GSTR-9 (annual return)

   • Maintain invoices and tax records

4. Advance Tax:

   • If LLP tax liability exceeds ₹10,000, pay quarterly

   • Avoid interest under Section 234B / 234C

4. Legal & Regulatory Compliance

1. LLP Agreement:

   • Must be registered with ROC

   • Governs internal operations, profit sharing, duties, and decision-making

2. MCA Filings:

   • Maintain DSC of designated partners

   • File all event-based and annual filings online

3. Penalties for Non-Compliance:

5. Operational & Advisory Notes

1. Internal Compliance Calendar:

   • Maintain all ROC, TDS, GST, and Tax deadlines

   • Automate reminders for partners and accounting team

2. Digital Compliance:

   • File all forms online via MCA portal

   • Use DSC for authenticity

3. Foreign Partners / FCRA Funds:

   • LLP receiving foreign funds (if NGO or trust-linked LLP) must comply with FCRA & FEMA rules

   • Report in Form 11 / 8 as required

4. Changes in Partners / Contributions:

   • Update Form 2 (capital contribution) & Form 4 (partner addition/cessation)

   • Reflect changes in LLP Agreement

5. Audit Compliance:

   • Ensure auditor signs Statement of Accounts & Solvency (Form 8)

   • Maintain all supporting documents for at least 8 years

6. Closure / Strike-Off LLP:

   • Comply with Section 61-72 of LLP Act 2008

   • File Form 24 (application for strike-off)

   • Ensure all taxes and liabilities cleared

6. Advanced Advisory Points

1. Partner Liability:

   • Only liable to the extent of capital contribution

   • LLP protects personal assets of partners

2. LLP Name Compliance:

   • Must not resemble any existing company or LLP

   • Avoid infringement of trademark

3. Compliance Hierarchy:

   • ROC Filings → Tax Filings → TDS → GST → Audit → Annual Return

4. Record Retention:

   • Books of accounts, invoices, bank statements, and ROC filings – retain 8 years

   • TDS, GST records – retain 6 years

5. Common Mistakes to Avoid:

   • Late filing of Forms 11 & 8

   • Non-updating partner contributions or changes

   • Ignoring TDS / GST / IT deadlines

   • Not reconciling Form 26AS

6. Best Practices:

   • Maintain LLP compliance calendar

   • Conduct internal audit quarterly

   • Keep digital and physical backups of all filings

   • Appoint responsible partner or compliance officer