Benefits Of Filing Annual Compliance For LLP | Ebizfiling
                     The benefits of filing annual 
compliance for LLP
Introduct
ion
LLP stands for Limited Liability Partnership. It is an alternative corporate 
structure  where the members benefit from the feature of limited liability 
(which means that the  members are liable for the shares they own) and 
the feature of the flexibility of
partnership (which means that the members are free to decide the duties 
and
responsibility of their own through an LLP agreement). When you register 
your business  as LLP there is certain compulsory annual compliance for 
LLP that is required to be  filed. In this blog, we will learn about the various 
LLP annual compliance and the benefit  of filing annual compliance for LLP.
What is an LLP annual 
compliance?
Every Limited Liability Partnership must file LLP annual compliance each 
financial year  to maintain an active status on the MCA portal. Regardless of 
the fact the LLP is in  operation or not. LLP annual compliance is compliance 
which an LLP files to MCA and  Income Tax Authorities. There are two 
different forms to be submitted to the MCA and  one Income Tax Return form 
submitted to the Income Tax authorities.
Various annual compliance 
for LLP
Below are the 3 e-forms filed by the LLP every year with MCA and 
Income Tax  Department:
1.Statement of insolvency and accounts
Fill the Form 8 for filing the accounts and insolvency statement of an LLP as 
instructed  by the MCA. Along with the form attach details of the assets and 
liabilities of the LLP, a  statement of revenue and expenditure, and a 
declaration of the financial state of the LLP  by its authorized partners. The 
form 8 should be filed by the partners and it should be  certified by the CS/ 
CA. It is an annual compliance for LLP which should be filed on 30th  
October of every financial year. It should be noted that the CS/ CA should 
audit the
books in case the annual turnover of LLP is more than INR 40 lakh or the 
contribution is  more than INR 20 lakh.
2.Filing of annual return
Fill the Form 11 for filing the annual return of the LLP as instructed by MCA. 
The annual  return should be filed with the Registrar of Companies. Along 
with Form 11 attach the  DSC of the designated partners. The form 11 should 
be filed by the partners and
certified by the CS/ CA only when the annual turnover is more than INR 5 Cr. 
or the  contribution is more than INR 50 lakh. It is an LLP annual comp
liance which should be  filed on 30th May in every financial year.
3.Filing of income tax return
Since LLP is a separate legal, partners have to file LLP annual tax return. ITR 
form 5 is
the form for filing the income tax returns of LLP. The purpose of filing ITR 5 is 
to file the  annual turnover of the LLP. According to the section 139(1) of the 
Income Tax Act, 1961  each LLP registered in India needs to file an income 
tax return. The due date for filing
ITR 5 is 31st July in case of no audit and if the audit is required then the due 
date is 30th  September. The audit happens when the turnover of the LLP is 
more than INR 40 lakhs  or the capital exceeds INR 25 lakhs, the accounts of 
the LLP should be audited by
Chartered Accounted.
Benefits of filing annual compliance for LLP
Listed below are some benefits of filing annual compliance for LLP every year:
A.Simpler conversion
Filing annual compliance every year can help the LLP to convert to any other 
type of  company easily and smoothly. The Registrar may ask for the records 
of LLP compliance  to check if it is filed regularly at the time to conversion.
B.Active status
If the LLP continuously fails to submit annual return and statements of 
insolvency &  accounts, then it can be declared as inactive or a default 
status will be given. So to  maintain the status active, it is important to file 
each LLP annual compliance in every  financial year.
C.Avoid penalties
If an LLP files compliance regularly then it can avoid the fines or penalties 
associated  with non-filing of compliance or late filing of compliance. So 
filing annual compliance  for LLP is must.
D.Financial worth
The forms filed by the LLP are accessible to other companies. As a result, the 
interested  party may consider the financial worthwhile entering into contracts 
or executing big  undertakings. So filing the forms along with the necessary 
financials can give an idea to  the interested person.
Conclusion
We will conclude by saying that it is beneficial for the Limited Liability 
Partnership to file  compliance for LLP every year in many ways. Filing the 
annual compliance of an LLP is  easier than any type of company because 
LLP has less compliance compared to a  company. There is not one single 
benefit but many benefits of filing annual compliance 
of LLP such as conversion, avoid penalties, active 
status, etc.