Annual ROC Filing Compliance for LLPs in India
Indian companies and LLPs must adhere to annual filing requirements mandated by the Companies Act of 2013 and the Limited Liability Partnership Act of 2008. These filings with the ROC are due annually or upon the incidence of specific events.
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- Annual Returns Filing (Form 11)
- Statement of Accounts & Solvency (Form 8)
Overview of ROC Compliances
As per the LLP Act 2008 and rules, LLPs in India must comply with certain annual filing requirements with the Registrar of Companies (RoC). These include filing Form 8 (Statement of Account & Solvency) within 30 days from the end of six months of the financial year, and Form 11 (annual return), within 60 days from the close of the financial year, declaring the financial status of the LLP.
Additionally, LLPs must maintain proper books of accounts and have their accounts audited if their annual turnover exceeds ₹40 lakhs or if the contribution exceeds ₹25 lakhs. Compliance with these requirements ensures transparency and accountability, aiding in the legal and financial health of the LLP. Failure to comply with these regulations can result in penalties and legal consequences.
As per the LLP Act 2008 and rules, LLPs in India must comply with certain annual filing requirements with the Registrar of Companies (RoC). These include filing Form 8 (Statement of Account & Solvency) within 30 days from the end of six months of the financial year, and Form 11 (annual return), within 60 days from the close of the financial year, declaring the financial status of the LLP.
Additionally, LLPs must maintain proper books of accounts and have their accounts audited if their annual turnover exceeds ₹40 lakhs or if the contribution exceeds ₹25 lakhs. Compliance with these requirements ensures transparency and accountability, aiding in the legal and financial health of the LLP. Failure to comply with these regulations can result in penalties and legal consequences.
Understanding ROC Annual Filing
Annual filing with the ROC provides critical information about a company’s financial status, structure, and compliance status with the statutory regulations. It includes two main forms – Form AOC-4 (for filing financial statements) and Form MGT-7 (for filing annual returns).
Applicability of ROC Filings for LLPs
Under the LLP Act, 2008, and MCA guidance, all LLPs are required to annually file their financial statements and returns with the Registrar of Companies (ROC) to maintain compliance and transparency.
Why ROC Filing is important?
ROC annual filings are essential for LLPs to ensure legal compliance, maintain transparency, and enhance their credibility and financial stability.
Ensures Legal Compliance
Maintains Transparency
Facilitates Creditworthiness Assessment
Avoids Penalties
Builds Investor Confidence
Facilitates Regulatory Oversight
Ensures Legal Compliance
Annual filings with ROC keep LLPs in compliance with the LLP Act, 2008, and MCA regulations.
Maintains Transparency
Filings provide a clear financial picture, building trust among investors, creditors, and the public.
Facilitates Creditworthiness Assessment
Entitles pregnant employees to paid leave for a specified period before and after childbirth, ensuring financial support during maternity.
Avoids Penalties
Timely submissions prevent late fees and penalties, safeguarding the LLP from unnecessary financial burdens.
Builds Investor Confidence
Regular compliance and disclosure of financial information can build trust and confidence among potential investors.
Facilitates Regulatory Oversight
These filings enable regulatory bodies to monitor LLP activities, ensuring adherence to legal and financial norms.
Key Financial & Compliances Process for a LLP
Annual Reporting Process as per the Companies Act,2013, and ICAI standards.
Mandatory Audit: As per the LLP Act, an audit is mandatory if the annual turnover exceeds ₹40 lakhs or if the contribution exceeds ₹25 lakhs.
Voluntary Audit: LLPs not hitting the mandatory threshold may also choose to appoint an auditor voluntarily for better financial oversight.
Within 30 Days of Incorporation (if applicable): For LLPs requiring mandatory audit, an auditor should be appointed within 30 days of incorporation for the first financial year.
Subsequent Appointments: For subsequent years, the appointment must be made within 30 days before the end of each financial year.
Continuous Process: The LLP is required to maintain proper books of account on a cash or accrual basis. The books of accounts should be kept at the registered office of the LLP and should reflect true and fair values of the state of the LLP’s affairs.
Documentation: This includes documenting all sales, purchases, receipts, expenditures, and other financial transactions systematically.
Preparation of Financial Statements: After the books of accounts have been prepared, the next step is the preparation of the financial statements, including the Balance Sheet and the Profit & Loss Account, for the financial year.
Approval from Designated Partners: Before these statements are audited, they need to be approved by at least two designated partners of the LLP.
Conducting the Audit: Once the financial statements are prepared and approved by the designated partners, the appointed auditor conducts the audit as per the ICAI guidelines.
Audit Report: The auditor then provides an audit report, ensuring that the financial statements give a true and fair view of the LLP’s financial position and comply with the statutory requirements.
After the completion of the audit, the LLP is required to file Form 11 (Annual Return) and Form 8 (Statement of Accounts and Solvency) with the Ministry of Corporate Affairs (MCA).
Form 11 (Annual Return): All LLPs must file Form 11 with the Ministry of Corporate Affairs (MCA) within 60 days from the end of the financial year. This form is a summary of the LLP’s management affairs.
Form 8 (Statement of Accounts and Solvency): LLPs are required to file Form 8 with the MCA within 30 days from the end of six months of the financial year. This includes the statement of assets and liabilities and the statement of income and expenditure for the year. If audit is applicable, the audited financial statements are also attached.
Consequences of Failing to File an Annual Return of LLP as per LLP Act 2008
The filing of an annual return is a critical compliance requirement for Limited Liability Partnerships (LLP) under the LLP Act, 2008. Failing to adhere to this requirement can lead to several adverse consequences, affecting both the LLP and its designated partners.
Penalty & Late Fee
Monetary Penalties: LLPs are fined ₹100 daily if they don’t submit their annual returns (Form 11) and financial statements (Form 8) by the due date, as per the LLP Act, 2008. This daily charge can add up to a large sum over time if the filing is delayed significantly.
No Cap on Penalty: There’s no maximum limit for this penalty, meaning the longer the delay in filing, the larger the total fine becomes, creating a possible major financial issue for the LLP.
Disqualification of Designated Partners
Personal Liability: The failure to file an annual return can also affect the designated partners personally. According to the LLP Act, 2008, non-compliance with filing requirements can lead to the disqualification of designated partners.
Restrictions on Other Directorships: Disqualified designated partners may face restrictions on managing or starting other LLPs or companies. This disqualification can have a long-term impact on their professional and business activities.
Risk of LLP Striking Off
Removal from Registrar: If an LLP consistently fails to file its annual returns & financial statements, the Registrar of Companies (RoC) may determine that the LLP is no longer operational. This could lead to the LLP being removed from the official Register of LLPs.
Legal Repercussions: When an LLP is struck off, it’s legally dissolved, leading to serious consequences for its partners, who may face personal liability for its debts and obligations.
Annual ROC Compliance E-Forms under the LLP Act,2008
Here’s a comprehensive table that outlines the key forms LLPs must file, their purpose, any required attachments, due dates, and applicability:
| Form Name | Purpose of E-form | Attachments | Due Date of Filing | Applicability |
|---|---|---|---|---|
Form ADT-1 | Appointment of Auditor | Consent of the auditor, resolution for auditor appointment | Within 15 days from the conclusion of the AGM | Applicable to LLPs required to appoint auditors |
Form 11 | Annual Return of LLP | Details of the total contribution by partners, details of partners, etc. | Within 60 days from the close of the financial year, i.e., by 30th May every year | Applicable to all LLPs |
Form 8 | Statement of Account & Solvency | Details of the assets and liabilities, and the Statement of Income and Expenditure | Within 30 days from the end of six months of the financial year, i.e., by 30th October every year | Applicable to all LLPs |
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