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Compliance for LLP (Limited Liability Partnership)

Before diving into the LLP compliance checklist, it’s essential to understand the nature of a Limited Liability Partnership (LLP). An LLP is a hybrid business structure that combines the flexibility of a partnership with the benefits of limited liability. It is ideal for small and medium-sized businesses, allowing partners to share responsibilities while safeguarding personal assets from business liabilities.

However, to maintain its legal status and operational integrity, an LLP must adhere to several LLP compliance requirements set by regulatory authorities, including the Government of India.

Benefits of Compliance for LLP

Separate Legal Entity Status

Compliance ensures that the LLP is recognized as a separate legal entity, distinct from its partners, thereby fostering trust and credibility among stakeholders.

Limited Liability Protection

Partners in an LLP enjoy limited liability, meaning their personal assets remain protected from the company’s debts and obligations, reducing personal financial risks.

Improved Credibility & Funding Access

Regular LLP statutory compliance enhances the firm’s reputation, making it easier to secure funding and attract investors. It reflects professionalism and builds trust with clients, investors, and creditors.

Penalty & Legal Risk Prevention

Timely compliance ensures the LLP avoids penalties, legal disputes, and potential dissolution due to non-compliance.

LLP Compliance Checklist and Process

Prepare Financial Statements

These include the balance sheet, profit and loss account, and cash flow statement, which must adhere to Indian accounting standards to reflect the LLP’s financial health accurately.

Form 11 (Annual Return)

This must be filed within 60 days after the end of the financial year. It includes details about the partners and their contributions. Form 11 is a critical part of LLP ROC compliance.

Form 8 (Statement of Accounts and Solvency)

This form, which includes the LLP’s financial statements and solvency status, must be filed within 30 days after the end of the financial year.

Submit Forms to ROC

Both Form 11 and Form 8 must be submitted to the Registrar of Companies (ROC) via the MCA portal to ensure all filings are completed within the prescribed timelines.

Documents Required for LLP Compliance in India

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    Financial statements

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    Form 11 and Form 8

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    The Partnership Deed

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    Audit report (if applicable)

Frequently Asked Questions

Have a look at the answers to the most asked questions.

FAQ Illustration

LLPs are governed by the Limited Liability Partnership Act, 2008, under the Ministry of Corporate Affairs.

Benefits include limited liability, legal recognition, management flexibility, and easier access to funding.

LLPs must file annual returns, maintain financial statements, and periodically undergo audits as part of their annual compliance obligations.

Form 11 is the annual return for LLPs, containing details of partner contributions and other business information.

Form 8 is a statement of accounts and solvency, reporting the LLP’s financial performance.
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