After incorporation, every LLP is required to comply with the time-sensitive obligations imposed by the Registrar of Companies (ROC). LLPs generally face fewer compliance requirements compared to other business structures, however, it is still important for them to adhere to post-incorporation compliances. Failure to do so may result in penalties for the business owners. This article provides an in-depth overview of the mandatory post-incorporation compliances for LLPs.
List of Mandatory post incorporation compliances for LLP | ||||||
Sl. No | Particulars | Details | ||||
1 | FILING OF LLP AGREEMENT | For an LLP, its partners must reach a consensus on an LLP Agreement right after the LLP is established, and a copy of this agreement must be filed with the Registrar of Companies using LLP Form 3 within thirty days of the LLP's incorporation. An LLP agreement is a binding agreement between the active partners that specifies their rights and obligations. Within 30 days of its formation, an LLP must file a copy of this agreement with the relevant authorities. If the LLP fails to do so, it will incur a daily fine of Rs 100. | ||||
2 | APPLICATION FOR PAN | Every LLP must secure a Permanent Account Number (PAN) from the Income Tax Department of the Government of India as a requirement. | ||||
3 | APPLICATION FOR TAN | Every LLP is obligated to obtain a Tax Deduction and Collection Account Number (TAN) from the Government of India's Income Tax Department. | ||||
4 | GST REGISTRATION | As per the Goods and Services Tax (GST) Act and Rules, any company with an annual turnover exceeding Rs. 40 lakhs (or Rs. 20 lakhs for service providers) is required to register for GST. | ||||
1. If the LLP's current supply of products and services exceeds Rs 20 lakh. | ||||||
2. For the North-Eastern states, the threshold for GST registration is set at Rs 10 lakh. | ||||||
3. If the company engages in inter-state supply of goods and services. | ||||||
4. Companies engaged in e-commerce activities. | ||||||
5. Individuals or entities serving as input service distributors (ISD). | ||||||
5 | OPENING BANK ACCOUNT IN LLP NAME | LLP entities must open a current account in their name with any bank in India. In India, all registered entities are mandated to have a current bank account with a recognized bank, and LLP entities are no exception. Most banks now offer online portals for businesses to establish current bank accounts. The partner will need to provide the following documentation when submitting the online application through these portals. | ||||
6 | Depositing Share Contribution Fund To The Designated Bank | Post-incorporation compliance for LLP, this is one of the most critical requirements. As per the partners' shareholding capacity, each partner must deposit their share into the designated bank account within the specified timeframe. A partner holding a share worth Rs 20,000 or more may transfer funds to the company from their personal account through online transfer or a check. | ||||
7 | SHOP AND ESTABLISHMENT REGISTRATION | Every business establishment must obtain Shop and Establishment Registration within 30 days of registering under the relevant state Shop and Establishment Act and Rules. | ||||
8 | PROFESSIONAL TAX REGISTRATION (EMPLOYER & EMPLOYEE) | Every business entity is obligated to obtain Professional Tax - Employer Registration (Enrolment Certificate) within 30 days of its incorporation. | ||||
9 | MSME/SSI REGISTRATION | MSME registration involves registering your LLP under the MSME Development Act to avail the benefits offered to Small and Medium Enterprises (SMEs). | ||||
10 | BOOKS AND ACCOUNTS OF LLP | LLP entities are required to maintain Books of Accounts for all their income and expenditures, as well as to comply with legal requirements under the Companies Act and other relevant laws. | ||||
11 | APPOINTMENT OF AUDITORS | Every LLP with a capital commitment exceeding Rs.25 lakhs or annual revenue exceeding Rs.40 lakhs must have its accounts audited by a practicing Chartered Accountant. | ||||
As per the current regulations, every LLP must have its accounts audited by a practicing Chartered Accountant if they meet the following criteria. | ||||||
1. The company’s annual turnover exceeds Rs 40 lakhs. | ||||||
2. Alternatively, the donation exceeds the Rs 25 lakhs barrier limit. | ||||||
To be eligible for exemption from audit, the LLP's accounts must feature a statement from the partners affirming their responsibility in fulfilling accounting and financial reporting obligations. | ||||||
