Post Incorporation Compliances for LLP

Post Incorporation Compliances for LLP.

Every LLP is obliged to comply with the ROC’s time-bound compliances upon LLP Registration. These regulations and procedural considerations ensure that the LLP functions smoothly. In general, LLPs encounter less compliance than other business structures. LLPs must comply with post-incorporation compliances; failure to do so will result in a penalty for the firm’s owners.

The ideal sort of business registration is an LLP Partnership since it requires less compliances than other types of company registrations. However, we must complete Compliances on time or the Penalty metre will continue to increase.

With the successful foundation of your cherished company, it is time to go forward with the Post Incorporation phases for your business, which will aid your firm in maintaining compliant with the requirements of the Ministry of Corporate Affairs.

This post will go over the Post-Incorporation Compliances for LLP.

List of LLP post-incorporation compliances that must be met

The limited liability partnership (LLP) is a corporate business structure that combines the benefits of a company’s restricted liability with the flexibility of a partnership firm. The LLP is a separate legal entity that does not imperil the partner’s personal assets due to the limited liability in the case of insolvency. In India, the rights to incorporate such a business kind are owned by ROCs from several jurisdictions. As soon as they are constituted, these entities must comply with the following post-incorporation compliances for LLP.

1. LLP AGREEMENT

An LLP’s Partners must agree on an LLP Agreement as soon as the LLP is formed, and a copy must be filed with the Registrar of Companies on LLP Form 3 within 30 days after incorporation.

An LLP agreement is a contract between active partners that specifies the rights and responsibilities of the serving partners. An LLP must file an agreement within thirty days of its formation. If the company does to follow this clause, it would be penalised Rs 100 every day.

2. PERMANENT ACCOUNT NUMBER (PAN) APPLICATION

The Income Tax Department of the Government of India requires every LLP Company to get a Permanent Account Number (PAN).

3. ACCOUNT NUMBER FOR TAX DEDUCTION AND COLLECTION (TAN)

Every limited liability partnership (LLP) must get a Tax Deduction and Collection Account Number (TAN) from the Government of India’s Income Tax Department.

4. OPENING A BANK ACCOUNT IN THE NAME OF THE LLP

Any Bank of India must open a current account in the name of the LLP.

Registered entities in India are needed to open a current bank account with an authorised bank. The same holds true for LLP-based businesses.

Almost all banks now have a webpage where companies may open current bank accounts electronically. When completing the online application, these portals will ask the partner to provide the following documents.

  1. LLP Agreement
  2. Board Resolution 
  3. Pan of the Company 
  4. Proof of the partners’ addresses and IDs
  5. The ROC issued an incorporation certificate.

The bank will then finish the remaining formalities offline.

5. REGISTRATION OF MSME/SSI

MSME registration is the process of registering your LLP under the MSME Development Act in order to gain SME benefits.

6. LLP BOOKS AND ACCOUNTS

The LLP is required to keep Books of Accounts for all receipts and payments in order to comply with legal requirements under the Companies Act and other related legislation.

7. LLP BOOKS AND ACCOUNTS

Every Business Establishment is required by the appropriate State Shop and Establishment Act and Rules to get Shop and Establishment Registration within 30 days after registration.

8. EMPLOYER AND EMPLOYEE PROFESSIONAL TAX REGISTRATION

Within 30 days of establishment, every business must get Professional Tax – Employer Registration (Enrolment Certificate).

9. INFUSION OF INITIAL CAPITAL BY MEMORANDUM SUBSCRIBERS

Members named in the Memorandum of Company must submit the amount of subscribed capital specified in the Memorandum of Association to the company registration within 60 days of its formation.

10. AUDITORS APPOINTMENT

A Chartered Accountant in Practise must audit the books of any LLP with a capital commitment of more than Rs.25 lakhs or annual income of more than Rs.40 lakhs.

According to the present bylaws, every LLP must have its finances audited by a practising CA if the following requirements are met.

  1. The yearly turnover of the firm reaches Rs 40 lakhs, or 
  2. the donation exceeds the Rs 25 lakhs barrier limit.

The LLP’s accounts must include a declaration from the partners confirming their commitment to fulfilling accounting and financial statement duties in order to qualify for the audit exemption.

11. REGISTRATION FOR GST

Every entity having an annual turnover of more than Rs.40 lakhs (service providers 20 lakhs) is required to register for GST under the Goods and Services Tax (GST) Act and Rules.

GST is a sort of integrated tax system that tries to combine various indirect taxes such as CGT, VAT, import-export duty, octroi, luxury tax, and entertainment tax. GST registration is a legal requirement for registered firms in India that meet the fundamental GST Act standards listed below.

  • If the company’s current product and service supply surpasses Rs 20 lakh.
  • The limit for North-Eastern states is Rs 10 lakh.
  • If the firm provides products and services beyond state lines.
  • E-commerce businesses. 
  • Taxpayers acting as intermediaries.

12. REGISTRATION OF TRADESMARKS

A trademark Registration is the only way to completely protect a company name. Transferring the share contribution fund to the selected bank.

This is perhaps the most essential post-incorporation compliance requirement for an LLP. Every partner must deposit their contribution into the appropriate bank account within the time limit given depending on their individual ability. A partner with a Rs 20,000 or more ownership capacity may contribute funds to the company from their own account by online transfer or cheque.

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