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LLP Advisory & Compliance

A Limited Liability Partnership (LLP) is a hybrid model combining the corporate flexibility of a company with the operational ease of a partnership. Although its compliance burden is lower than that of a Private Limited company, missing deadlines attracts a steep compounding penalty of ₹100 per day with no upper limit.

1. Formation & Structuring
Incorporation: Formed digitally through the MCA V3 portal. It requires a minimum of 2 Partners (with no upper limit), out of which at least 2 must be Designated Partners (DPs). At least one Designated Partner must be an Indian resident.

LLP Agreement: Filing the partnership agreement in Form 3 within 30 days of incorporation is mandatory. This document acts as the LLP’s constitution, defining roles, rights, profit-sharing ratios, and capital contributions.

2. Ongoing Filings & Changes (Within 30 Days)
Form 4: Filed for the appointment, resignation, or modification of details regarding partners or Designated Partners.

Form 3 (Amendment): Filed to record any structural updates to the original agreement, such as increasing capital, changing the business objective, or modifying partner clauses.

3. Annual Compliance Roadmap
Form 11 (Annual Return): Contains management profiles and partner summaries. Due Date: 30th May.

ITR-5 (Income Tax Return): The standard tax return for the partnership firm. Due Date: 31st July.

Form 8 (Statement of Accounts): A mandatory filing declaring the firm’s financial status and Solvency. Due Date: 30th October.

Note: A statutory audit by a Chartered Accountant (CA) becomes mandatory if the LLP’s annual turnover exceeds ₹40 Lakhs or its capital contribution exceeds ₹25 Lakhs.

4. Structural Conversions
LLP to Private Limited (Form URC-1): Executed to raise venture capital or issue shares. Requires 100% partner consent and a mandatory public newspaper notice (URC-2).

Private Limited to LLP (Form 18): Done to reduce compliance costs and eliminate dividend tax complexities. This conversion is permissible only if the company has no active secured loans or open charges.