LLP Annual Compliances for the Financial Year 2022–2026

A Limited Liability Partnership (LLP) is a popular form of business structure in India that merges the benefits of both a partnership and a company as well. While it offers limited liability to its partners, it is also relatively smooth and easy to manage. However, LLPs are still subject to various statutory compliance requirements under the Limited Liability Partnership Act, 2008, and other applicable laws.

This blog provides a comprehensive guide of the annual compliance requirements for LLPs for the financial years 2022–2026, including due dates, penalties, and best practices.

Why Are Annual Compliances Important?

Annual compliances are mandatory for every LLP, regardless of its business turnover or the current activity status. Non-compliance may result in various monetary penalties, disqualification of its partners, and even the striking off of the LLP from the Ministry of Corporate Affairs (MCA) records and register.

Key Annual Compliances for LLPs

Below are some important annual compliance requirements for LLPs:-

1. Filing of Annual Return – Form 11

• Due Date: 30th May every year.
• Applicable For: All LLPs registered in India.
• Details Required: Summary of the number of partners, capital contribution, changes in partners and other relevant details.
• Penalty for Delay: ₹100 per day of delay with no upper limit.

Note: Even if there is no business activity, the LLP must file Form 11.

2. Filing of Statement of Account & Solvency – Form 8

• Due Date: 30th October every year.
• Applicable For: LLPs that have completed at least 6 months from the end of the financial year.
• Details Required: Financial statements, profit and loss account, balance sheet, and declaration of solvency.
• Certification: Needs to be certified by a designated partner and a practicing Chartered Accountant/Cost Accountant/Company Secretary.
• Penalty for Delay: ₹100 per day of delay.

3. Income Tax Return Filing

• Due Date:
       - Without Audit: 31st July
       - With Audit: 31st October

• Applicable For: All LLPs whether in operation or not.
• Audit Requirement: If annual turnover exceeds ₹1 crore under the Income Tax Act, tax audit is mandatory. However, under MCA rules, an audit may still be required if the LLP’s turnover exceeds ₹40 lakh or contribution exceeds ₹25 lakh.
• Penalty for Delay: Penalty is of ₹5,000 if filed after the due date but before the date of 31st December; ₹10,000 if filed after 31st December.

4. Tax Audit (if applicable)

• LLPs with turnover exceeding ₹1 crore must get their accounts audited under section 44AB of the Income Tax Act.
• Audit Report must be filed in Form 3CA/3CB and 3CD.
• The audit helps in accurate tax computation and also ensures the compliance with income tax laws.

LLP Compliance Calendar: FY 2022–2026

Important: These deadlines apply to each financial year ending on 31st March. For example, for FY 2022–23, the annual return is due by 30th May 2023.

Recent Changes and Developments (2022–2026)

1. Increased Penalties: The MCA has made the structure of penalty stricter. Earlier, there were caps on penalties. Now, delays attract ₹100 per day per form.
2. Online Filing and Digital Signatures: All forms must be filed online using the MCA portal and digitally signed by the designated partners and professionals.
3. Mandatory Audit for Turnover over ₹1 crore: Previously, the audit limit was ₹40 lakhs, but it has now been revised to ₹1 crore.
4. Use of V3 MCA Portal: From 2023 onwards, all LLP-related filings are handled through the new MCA V3 portal, which offers better user experience and tracking.
5. Disqualification & Striking Off: LLPs that do not file Form 8 and 11 for two or more years are at risk of being struck off from the Register by the ROC.

Best Practices for LLP Compliance

• To Maintain Proper Books of Accounts: Even if the LLP is not in operation, books of accounts must be maintained.
• Engage a Professional: Consult a Chartered Accountant or Company Secretary for filing forms correctly and on time.
• Keep Track of Deadlines: Use a compliance calendar or reminder system to avoid penalties.
• Digital Signatures (DSC): Ensure that the designated partners’ DSCs are valid and renewed annually.
• Regular ROC Checks: Periodically check the status of your LLP on the MCA portal for any pending filings or notices.

Common Mistakes to Avoid

• Ignoring compliance in case of zero turnover.
• Forgetting to file DIR-3 KYC.
• Assuming that LLPs with no business activity are exempt.
• Using expired DSCs during filings.
• Missing the due dates and paying unnecessary late fees.

Consequences of Non-Compliance

• Heavy penalties for late filing.
• Disqualification of designated partners.
• Deactivation of DIN.
• LLP being marked as “defaulting” on MCA records.
• Striking off of the LLP by the Registrar.

Benefits of Staying Compliant

• Builds trust with clients, investors, and banks.
• Ensures smooth business operations and eligibility for loans or tenders.
• Avoids legal issues and government scrutiny.
• Helps in accurate financial planning and tax savings.
• Enhances credibility and reputation in the business ecosystem.

Conclusion

LLPs, though more relaxed in structure compared to companies, must comply with annual filing and tax obligations to stay in good standing with regulatory authorities. The financial years 2022–2026 have seen a tightening of rules and greater emphasis on transparency and timely compliance. Non-compliance is no longer affordable in the digital and automated regulatory environment. If you are seeking for professional help then do contact to CRSPL Business Consultants, they will guide you with industry experience.

LLP partners must take compliance seriously, stay informed about deadlines, and consult professionals to avoid penalties and reputational damage. Annual compliance is not just a legal formality—it is an essential part of running a responsible and sustainable business.

FAQs

Q1. Is annual compliance mandatory for an LLP that has not done any business?

Yes. Even if your LLP has not undertaken any business activity during the financial year, it is still mandatory to file Form 11 (Annual Return) and Form 8 (Statement of Account and Solvency). You must also file a Nil Income Tax Return with the Income Tax Department.

Q2. What happens if I miss the compliance deadlines for Form 11 or Form 8?

If you miss the deadlines, you will incur a late fee of ₹100 per day per form, and the penalty keeps increasing until the form is filed. In addition, the Ministry of Corporate Affairs may take further actions, including disqualification of designated partners or striking off the LLP.

Q3. Can an LLP file annual compliance forms online?

Yes. All LLP forms like Form 11, Form 8, and ITR are filed online. Form 11 and Form 8 must be filed on the MCA V3 Portal, and Income Tax Return is filed through the Income Tax e-Filing portal. Designated partners must have a valid Digital Signature Certificate (DSC) to sign and submit the forms.