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LLP compliance post incorporation

LLP Compliance post incorporation

As a company needs to be incorporated, a Limited Liability Partnership (LLP) also needs to be incorporated. Since LLP is incorporated, there are some post incorporation compliances which it needs to fulfill. Being a separate legal entity fulfilling these compliances are very essential in order to avoid any legal percussion.

Following the article discusses some of the major statutory requirements that a Limited Liability Partnership process needs to comply with after it is being incorporated

Filling with LLP Agreement:

An LLP Agreement is a contract between partners that describes the mode of management of an LLP. LLP Agreement lays down the roles, responsibilities, rights, and powers of the partners. The agreement should be filed within 30 days of incorporation of the LLP in Form 3. Failure to do so will attract a penalty of Rs. 100.0 per day until the said compliance is met with. Hence, it is very important to file the LLP Agreement within the prescribed time.

Opening an LLP Bank Account:

A separate bank account must be opened in the name of the LLP. Since LLP is a separate legal entity, it can open its own bank account. The bank account can be opened in two separate banks so as to avoid in the disturbance that may be caused in case of bank issues. There are certain documents which are required to be submitted in order to open a bank account. Namely: Copy of the LLP agreement ,Copy of the Incorporation document and DIN of the designated partners, Copy of the LLP Registered in Certificate issued by the ROC ,Copy of LLP-IN issued by the ROC, Copy of the Resolution to open a bank account, List of authorized person/s with the specimen signatures to operate the account duly attested by Designated Partners, Copy of PAN card or PAN application challan. A Designated Partner must sign all the above documents and an LLP seal should be put on all the documents.

Apply for PAN Card:

After the incorporation, LLP must submit an application to obtain its PAN Card. This application can be made online. After the application has been filed, a designated partner has to send a PAN acknowledgment that he must duly sign and seal, to the NSDL office for issue of PAN card.

Filing of annual return:

In India, LLPs have to compulsorily maintain their financial year from 1 April to 31 March. LLPs need to file their annual return within 60 days from the end of close of financial year. Also, the LLPs have to file their Account & Solvency within 30 days from the end of six months of the close of financial year. LLP has to ensure that its annual returns are filed within the due date. Failure to do so would attract a fine of Rs. 100 per day until the event of filing.

Books of account:

Maintain a book of accounts is a fundamental requirement which an LLP needs to comply with post incorporation. Book of accounts should be maintained on a cash or accrual basis and accounting should be done according to the double entry system. The books can be maintained manually by keeping the register at the Registered Office. The books can also be maintained electronically. There is accounting software like Tally and Quickbooks that are used to maintain accounts electronically.
Related Post: Draft LLP Agreement for Addition of Partner in LLP

Holding compliance meetings

An LLP is required to conduct the First General Meeting within 30 days of incorporation of the LLP. This meeting is held only once in the lifetime of the LLP. A minimum of one General Meeting had to be held in the duration of the complete financial year of the LLP. LLP has to hold at least two Executive Meetings during the financial year of the LLP.

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LLP compliance post incorporation