Get clear answers to frequently asked questions about proprietorship setup, benefits, legal formalities, and compliance—so you can start your business in India with clarity and confidence.
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Compliance for Limited Liability Partnership
For a Limited Liability Partnership (LLP), adhering to annual filing obligations is crucial to maintaining compliance and avoiding heavy penalties for non-compliance. While LLPs generally have fewer annual compliance requirements compared to private limited companies, the consequences of failing to meet these requirements can still be severe. For instance, whereas a private limited company may face penalties up to INR 1 lakh, LLPs may incur fines reaching INR 5 lakh for non-compliance. At India Company Setup, we understand how important it is for LLPs to stay compliant, and we offer specialized services to help ensure all obligations are fulfilled efficiently and accurately.
Start your LLP compliance journey today with India Company Setup to avoid fines and stay on the right side of the law.
Maintenance of Proper Book of Accounts
Since LLPs are recognized as distinct legal entities, they must meet specific compliance mandates. These responsibilities primarily lie with the Designated Partners of the LLP. Below are the essential annual compliance requirements:
• Maintenance of Proper Book of Accounts
• Filing of Annual Return
• Filing of Statement of Accounts
• Filing of Income Tax Return (ITR – 5)
• Filing of Tax Audit (If Applicable)
Meeting these obligations ensures the LLP remains legally compliant and bolsters transparency, financial accountability, and trustworthiness.
Filing of Annual Return – LLP Form 11
Every LLP must submit an annual return to the Ministry of Corporate Affairs for each financial year using Form 11. This form collects vital data about the LLP, such as the total number of designated partners, their individual details, partners’ contributions, and a consolidated view of all members involved.
Deadline for Filing
Form 11 must be filed within 60 days from the close of the financial year. Therefore, the due date is May 30th of each year.
Importance of Timely Submission
Timely filing is essential. If an LLP fails to submit its annual return, it cannot be closed or dissolved until all filings, including Form 11, are completed.
Penalty for Delay
The fine begins accruing from the due date and continues until the return is finally submitted.
Filing of Statement of Accounts – LLP Form 8
LLPs are obligated to file a Statement of Accounts and Solvency every year. This document outlines the LLP’s financial condition, including its assets and liabilities, and is filed using Form 8.
Due Date
Form 8 must be submitted within 30 days following the six-month period after the end of the financial year—typically by October 30th.
Signature and Certification
Two designated partners must digitally sign Form 8. Additionally, it requires certification by a chartered accountant, company secretary, or cost accountant.
Components of Form 8
Form 8 is divided into two sections:
• Part A – Solvency Statement: Declares the LLP’s financial soundness.
• Part B – Statement of Income and Expenditure & Accounts: Includes detailed records of financial transactions and an account summary.
Penalty for Late Filing
If Form 8 is not filed on time, a penalty of Rs. 100 per day applies, continuing until the form is submitted.
Maintaining LLP compliance through timely filing of Form 8 is crucial for preserving the LLP’s legal standing and avoiding additional costs.
Audit and Tax Filing Requirements for LLPs
Under the LLP Act, 2008, and the Income Tax Act, 1961, LLPs are subject to specific tax and audit regulations.
Tax Audit
LLPs must undergo an audit by a Chartered Accountant if:
• Their annual turnover exceeds Rs. 40 lakhs, or
• Partner contributions exceed Rs. 25 lakhs.
In such cases, the tax return must be filed by September 30th of the relevant assessment year.
📝 Note: From Assessment Year 2021-22 (Financial Year 2020-21) onward, the tax audit threshold has been raised to Rs. 5 crore under specific conditions—if cash receipts and payments do not exceed 5% of total receipts and payments, respectively.
Tax Filing Deadline (Non-Audited LLPs)
If an LLP is not required to undergo a tax audit, the deadline to file the income tax return is July 31st.
International Transactions – Form 3CEB
LLPs that are involved in international transactions or specified domestic transactions must submit Form 3CEB, which must be certified by a practicing Chartered Accountant. The due date for filing this form is November 30th.
Remaining compliant with these audit and tax obligations is crucial for LLPs to avoid legal issues and penalties.
Income Tax Return (ITR – 5)
Every LLP is required to file its income tax return using Form ITR-5. The deadline is July 31st unless a tax audit is mandatory, in which case the deadline is extended to September 30th. This return includes complete information on the LLP’s income, expenses, and tax liabilities.
LLP Annual Filing Compliance Calendar
Form Type |
| Description | Due Date | Filing Authority |
Form-8 |
| Statement of Accounts | 30th October | Registrar of Companies |
Form-11 |
| Annual Return | 30th May | Registrar of Companies |
ITR – 5 |
| Income Tax Return | 31st July or 30th Sept (if audited) | Income Tax Department |
Audit |
| Tax Audit (if applicable) | 30th September | Income Tax Department |
Form 3CEB |
| International Transactions | 30th November | Income Tax Department |
Advantages of LLP Annual Filing
Filing annual compliance documents offers several significant benefits:
• Improved Credibility: Enhances the LLP’s reputation, aiding in credit and loan approvals.
• Financial Record Keeping: Helps establish a verifiable financial history, which is useful for attracting investors and partners.
• Active Status Maintenance: Avoids the risk of being marked as defunct and incurring late penalties.
• Easier Conversion and Closure: Streamlines processes for converting the LLP into another structure or dissolving it.
Getting UDYAM Registration for a Proprietorship
One of the earliest and simplest business structures available for starting in India is sole proprietorship. Owned, run, and controlled by one person—the proprietor—a proprietorship is a kind of commercial entity. Starting the proprietorship and proprietor is quite simple since they are one and the same and there are rather little compliance requirements.
A proprietorship cannot feature other partners or stockholders since the owner and the company are one and the same. Moreover, from the business operations carried out under the sole proprietorship, the proprietor lacks limited liability protection. Therefore, every small company with no more than five staff members would find this kind of corporate entity most appropriate.
India Company Setup can help you register a simple and quick business structure perfect for solo entrepreneurs online, a proprietorship firm. Starting your proprietorship firm registration online fast and hassle-free is possible with our professional advice and simplified approach. Start your Sole Proprietorship registration with us online to release the possibilities of your company ideas.
Proprietorship's Bank Account
The bank current account for a proprietorship will be opened in the name of the business owner using his/her PAN. The business owner will have to submit proof for doing business. Any two of the following documents can be submitted to create a current account instead of savings account in the name of proprietorship:
GST registration certificate
Shop & Establishment Act license
License issued by the Registering authority like Certificate of Practice issued by Institute of Chartered Accountants of India, Institute of Cost Accountants of India, Institute of Company Secretaries of India, Indian Medical Council, Food and Drug Control Authorities,
Banks may also accept IEC (Importer Exporter Code) issued to the proprietary concern by the office of DGFT as an identity document for opening a bank account etc.
Obtaining Shops & Establishment Act License for Proprietorship
The procedure for obtaining a Shop and Establishment registration certificate differs depending on state. It’s accessible offline and online. Most states allow one to obtain Shop and Establishment Act registration in two to three weeks. India Company Setup simplifies the registration process for a proprietorship firm.
Activities of Proprietorship Business
In most sectors and businesses, a proprietorship can engage any kind of business activity that an Indian person is qualified for. Some industries, meanwhile, including banking, insurance, financial services, lending, defence, and telecommunication, call for specific authorisation. Under such circumstances, a business is legally obliged to get several Government approvals. Therefore, the structure of a proprietorship only fits for small-scale, business operations. This could be one of the restrictions of the registration of the proprietorship firm.
Compliance for Proprietorship
Some compliances relevant for a sole proprietorship registration are listed below:
Income Tax Filing: The business owner of a proprietorship will have to file a personal income tax return using the form ITR-3 or ITR-4.
Only income tax forms ITR-3 and ITR-4 let one declare company income. Hence, all proprietorships will have to file form ITR-3 or ITR-4 to be compliant with the income tax regulations.
GST Return Filing: If a proprietorship has GST registration, GST return must be filed every month and quarter as per the scheme under which the business is registered.
TDS Returns: In case the proprietorship is having employees or purchasing goods/services beyond a certain threshold – tax must be deducted at source and TDS returns must be filed every quarter.
In addition to the above, various other compliance requirements maybe applicable to the proprietorship based on industry and location.
What We Offer
At India Company Setup, we deliver a complete suite of business services to help you start, grow, and manage your company with ease. From registration to regulatory compliance, our expert support ensures your business stays legally sound and financially organized.
Daily & Monthly Bookkeeping
- Record all financial transactions.
- Maintain audit-ready books in sync with GST and Income Tax laws
- Stay prepared for MCA and statutory filings
Financial Reporting
- Preparation of Profit & Loss Statements and Balance Sheets
- Generate detailed balance sheets.
- Deliver cash flow statements.
Reconciliation Services
- Bank and credit card reconciliations.
- Ensure accuracy of all financial data.
- Maintain accuracy for timely Income Tax and MCA submissions
Secure Digital Bookkeeping
- Utilize encrypted software for data security.
- Anytime, anywhere access to your business data
- Aligned with India's data protection and compliance standards
Benefits of Our Bookkeeping Services
1. Accurate Financial Records
Our expert bookkeeping ensures every transaction is correctly recorded, reducing compliance errors and giving you a clear picture of your company’s financial health — crucial for GST, Income Tax, and MCA filings.
2. Time-Saving
Focus on growing your business while we manage your books. By outsourcing to us, you eliminate the burden of paperwork, reconciliations, and regulatory upkeep — saving you both time and effort.
3. Better Cash Flow Management
We help you monitor income and expenses in real time, so you maintain a healthy cash position, make informed decisions, and avoid last-minute cash crunches or missed tax deadlines.
LLP compliance refers to the legal and regulatory obligations that a Limited Liability Partnership (LLP) must fulfill annually or periodically. These include ROC filings, tax returns, and maintenance of financial records. Complying ensures the LLP stays in good legal standing and avoids penalties or disqualification.
Key annual compliances include:
Form 11 (Annual Return): Due by 30th May every year
Form 8 (Statement of Account & Solvency): Due by 30th October
Income Tax Return Filing: Due by 31st July (non-audit cases) or 31st October (audit cases)
Audit: Required if turnover exceeds ₹40 lakh or contribution exceeds ₹25 lakh
Yes. Even if the LLP has no revenue or operations, it must file Form 11 and Form 8 annually with the Registrar of Companies. Non-compliance attracts heavy late fees (₹100 per day per form) and potential legal action.
Penalties include:
₹100 per day per form for late filings (no maximum cap)
Prosecution and fines for partners and designated partners
Striking off of LLP for prolonged non-compliance
Difficulty in obtaining loans, government contracts, or investor trust
Yes. Most LLP compliance filings (ROC, ITR, etc.) can be done completely online through:
MCA Portal (for ROC forms)
Income Tax Portal (for ITR)
Additionally, professional service providers (CAs/CSs) offer end-to-end LLP compliance packages.
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