LLP is the Best form of Company Registration, It’s Having fewer compliances as compared with other types of company Registrations. Although we need to take care of Compliances on time, else the Penalty meter will rise. With the successful incorporation of your valuable company, it is time to move ahead with the Post Incorporation steps for your business which will help your company stay compliant with the norms laid by the Ministry of Corporate Affairs.
The Limited Liability Partnership Act of India established the limited liability partnership (LLP). The primary goal of introducing limited liability partnerships was to provide the flexibility of a partnership with the benefit of a company’s limited liability. Certain compliances and procedural matters must be completed previous to the formation of a Limited Liability Partnership. Many other types of companies, such as private company, are also needed to meet certain compliance requirements before incorporation.
Post-Incorporation Compliances for LLP
1. LLP Agreement:
Immediately after incorporation of the LLP, the Partners of a Limited Liability Partnership are required to execute an LLP Agreement and a copy has to be filed with the Registrar or Companies in LLP Form 3 within 30 days of incorporation.
If an LLP fails to submit an LLP Agreement within 30 days of its incorporation, it will face a heavy penalty of Rs.100 per day of default, with no limit on the maximum fine. As a result, extreme caution must be taken to ensure that the LLP agreement is correctly executed and submitted by the due date.
2. LLP Stationery:
LLP Seal: The LLP is a legal entity distinct from its members. Thus, the LLP seal would be required for the company’s bank account establishment and PAN application. Every LLP is required to purchase two round rubber seals bearing the LLP’s name and designation.
Letterhead: LLP stationery, including letterhead, invoices, official documents, etc., must include the LLP’s name and registered office.
3. Application for Permanent Account Number (PAN):
Every LLP Company has to obtain a Permanent Account Number (PAN) from the Income tax department, Government of India. Using form 49A, a person can apply for a PAN. A Designated Partner of the LLP must sign and seal the PAN acknowledgment after an online application has been filed. Once everything is finalized, the registration for a PAN card should be couriered to the NSDL office. The LLP’s PAN card will be delivered to its registered location within 10-20 business days.
4. Application for Tax Deduction and Collection Account Number (TAN):
Every LLP has to obtain a Tax Deduction and Collection Account Number (TAN) from the Income tax department, Government of India.
Tax Deduction at Source (TDS) is required for a specific class of payments, and the tax so deducted must be paid to the government. Tax Deduction and Collection Account Number (TAN) are necessary to allow TDS remittance.
5. Opening Bank Account in LLP Name
It is necessary to open a Current Account in the name of the LLP with any Bank of India. The majority of banks currently offer a web portal through which businesses can establish current bank accounts online. These websites will ask the partner to upload the following papers as they complete the online application.
- A copy of the LLP contract
- Copy of the chosen partners’ DPINs and the Articles of Incorporation
- A copy of the ROC’s Partnership Registration Certificate
- LLP-IN is given by the ROC, a copy
- Resolution to establish a bank account, in writing
- List of individuals with specimen signatures who are allowed to run the account, as attested by designated Partners
- Letter of PAN allocation copy
6. MSME/SSI Registration
MSME registration is the procedure to get your LLP registered under the MSME Development Act for SME benefits.
7. Books and Accounts of LLP
The LLP has to prepare and keep the Books of Accounts of all receipts payments and comply with legal requirements under the Companies Act and other various laws.
Book of accounts should be kept on a cash or accrual basis, and accounting should be done using the double-entry method. The books can be physically kept up to date by keeping the register at the Registered Office. The books may also be kept online. Accounting software such as Tally and Quickbooks is used to keep track of accounts online.
8. Shop and Establishment Registration
Every Business Establishments are required to obtain Shop and Establishment Registration under the respective State Shop and Establishment Act and Rules within 30 days of registration
The limited liability partnership (LLP) is required to obtain the Store and Establishment Registration in each state in which it has offices or establishments.
9. Professional Tax Registration – Employer & Employee
Every Company is required to obtain Professional Tax – Employer Registration(Enrolment Certificate within 30 days of incorporation). Additionally, every LLP must acquire Professional Tax – Employee Registration (Registration Certificate) when they begin employing individuals if their salary exceeds the specified limit (this limit varies from State to State).
If the Partners or Designated Partners are receiving a salary that is greater than what is allowed, they will be considered employees for this reason. Additionally, the employer is required to deduct Professional Tax from the employee’s salary and send it on a monthly basis to the State Government.
10. Infusion of Initial Capital by Subscribers to Memorandum
The subscribers to the Memorandum of Company have to bring the amount of subscribed capital as stated in the Memorandum of Association at the time of company registration within 60 days of incorporation.
It is recommended that the subscribed capital be brought within sixty days of the company’s incorporation, despite the fact that there are no specific conditions in the LLP Act regarding this time limit for bringing the capital.
11. Appointment of Auditors
Every LLP whose capital contribution exceeds Rs.25 lakhs or annual turnover exceeds Rs.40 lakhs has to get the accounts audited by a Chartered Accountant in Practice
12. GST Registration
Every business with an annual turnover exceeding Rs.40 lakhs (Service providers 20 lakhs) must have GST Registration under the Goods and Services Tax(GST) Act and Rules.
It is not necessary to obtain GST immediately following the incorporation of the LLP. The LLP can obtain this registration as needed. If the LLP is required to provide its GSTIN to any third parties or authorities as part of its business, the LLP may be required to acquire GST Registration immediately after registration.
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13. Trademark Registration
The registration of a company or limited liability company with a name does not provide complete protection for the name or brand. The protection of a company or limited liability partnership’s name under the Companies Act / LLP Act is confined to the extent that another company or LLP cannot be registered with the same or a similar name.
Ultimate protection for a company name is secured only through Trademark registration. If a trademark is used for goods and services belonging to distinct classes, separate applications must be filed for each class in order to obtain trademark protection for the respective goods and services.
14) Annual Return Filing:
LLPs in India are required by law to keep a financial year that runs from 1 April to 31 March. LLPs have 60 days from the end of the fiscal year to submit their LLP annual returns. Additionally, LLPs must submit their Account & Solvency within 30 days of the end of the six-month period following the conclusion of the fiscal year. LLP must make sure that its annual returns are submitted on time. If this wasn’t done, there would be a fee of Rs. 100 per day until the filing event.
15) Holding Compliance Meetings:
The First General Meeting of an LLP must be held within 30 days of the LLP’s formation. During the LLP’s existence, this meeting is only ever conducted. Throughout the entire LLP financial year, there had to be a minimum of one General Meeting conducted. LLP must conduct at least two executive meetings throughout its fiscal year.
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