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Post Incorporation Compliances for LLP

Nowadays the procedure of incorporating a company has been made easier which encourages full compliance by the companies. The management need to be fully aware of the post-incorporation compliance to avoid penalties.

Obtaining the Certificate of Registration for your Company is an exciting and memorable moment in your business start-up journey. You might have gone through the procedure of arranging needful and required documents as per prescribed standards of MCA (Ministry of Corporate Affairs).

Your Company is born and act as an artificial legal person with few inherent features, rights, powers, and liabilities.

Receive the Certificate of Incorporation is a starting point for a series of compliances a company you need to follow under several legislations in India from time to time.

‘IGNORANTIA JURIS NON EXCUSAT’- This term means Ignorance of Law Is Not an Excuse.

Following are some actions which need to be taken Post Incorporation Compliances for LLP: –

Within 30 DAYS

LLP Agreement

Immediately after incorporation of the LLP, the Partners of LLP are required to execute an LLP Agreement and a copy need to be filed with the Registrar or Companies in LLP Form 3 within 30 days of incorporation of LLP. The delay in filing LLP agreement can lead to penalty of INR 100.00 per day till the date of fling Form 3 with ROC.

Application for Permanent Account Number (PAN)

Every LLP need to obtain a Permanent Account Number (PAN) from Income tax department, Government of India.

Application for TAN

Every LLP need to obtain a Tax Deduction and Collection Account Number (TAN) from Income tax department, Government of India.

Opening Bank Account on the name of LLP

After incorporation of the Limited Liability Partnership, it is mandatory to open a Current Account in the name of the LLP with any Bank in India. All the transactions can only made through LLP Bank Account only.

Books and Accounts of LLP

Every LLP need to prepare and keep the books of account in double entry system of accounting on accrual basis. The LLP required to maintain the Books of Accounts of all receipts payments and to comply legal requirements under Companies Act and other various laws.

The books of account should keep at its registered office or other place located in India as the Board of Designated Partners may decide. The books of account can be maintained in electronic mode prescribed under Companies Act.

Professional Tax Registration – Employer & Employee

Every LLP is needed to obtain Professional Tax – Employer Registration (Enrolment Certificate) within 30 days of incorporation. This again is a state specific labour registration essential for all registered business whether you have any employees or not. This registration needs to renewal every year after payment of prescribed fee. Delay in obtaining the registration will lead to penalty to business on yearly basis.

Also, every LLP who employs people with more than the specified limit of salary (this limit varies from State to State) need to obtain Professional Tax – Employee Registration (Registration Certificate), when they start employing people.

Within 60 DAYS

Infusion of Initial Capital by Subscribers to Memorandum

The initial partners of LLP need to bring the amount of capital contribution as mentioned in the subscription documents and LLP Agreement at the time of LLP registration within 60 days of incorporation.

Though there are no explicit conditions in LLP Act as to this time limit for bringing the capital, it is advisable to bring the subscribed capital with 60 days of incorporation.

Appointment of Auditors

Every LLP whose capital contribution exceeds INR 25 lacs or annual turnover exceeds INR 40 lacs must get the accounts audited by CA. There is no essential audit requirement for other LLP’s.

Within 180 DAYS

GST Registration

Every business with annual turnover exceeds INR 40 lacs (Service providers 20 lakhs) is required to GST Registration under Goods and Services Tax (GST) Act and Rules.

It is not essential to obtain GST immediately after incorporation of the LLP. The Limited Liability Partnership can obtain this registration as and when required.

Trademark Registration

Registering LLP with a name does not provide complete protection to your brand name. Through trademark registration you can give your brand name an ultimate protection.