Accounting for an LLP
An LLP is lighter than a Private Limited company on audit and on meetings, but not on filings. You still file two forms with the Registrar every year whether or not you traded, and the MCA additional fee of ₹100 per day per form applies to an LLP exactly as it applies to a company. The audit is where the real relief is: an LLP is audited only once it crosses the turnover or contribution threshold.
What applies to you
The rules that apply because of how you are registered.
Two ROC forms every year. The annual return, and the statement of account and solvency. Both are due whether or not the LLP traded.
The same uncapped late fee. ₹100 per day per form, with no upper limit. LLPs are not treated more gently than companies here.
Audit only above the threshold. An LLP is audited once turnover or partner contribution crosses the limits. Below them, no statutory audit. This is the main saving over a company.
KYC for every designated partner. Every year. Miss it and the partner's DIN is deactivated until a fee is paid.
Your LLP agreement is the rulebook. Profit shares, partner remuneration and interest on capital all follow it, and the tax treatment follows what it actually says.
No board meetings, no AGM. An LLP does not carry the meeting and minute machinery a company does.
What we do about it
What we take over.
Books every month. Including partner capital and current accounts, kept properly rather than reconstructed at year end.
GST, TDS and the LLP's income tax return. Prepared, sent to you, filed once you approve.
Both annual ROC forms. Tracked and filed. We tell you the date before it arrives.
Partner remuneration and interest, done correctly. There are limits on what an LLP can deduct. Getting this wrong is a common and expensive error.
Notices handled. Forward it on WhatsApp. Routine notices are inside the fee.
The audit relief is real. The filing relief is not — the forms are due either way.
Questions
What people in your position ask.
Does an LLP need an audit?
Only above the thresholds. An LLP is audited once its turnover or its partner contribution crosses the limits set under the LLP Act. Below them there is no statutory audit, which is the main practical saving over a Private Limited company. The thresholds do get revised, so we check your position each year rather than assuming last year's answer.
We have not started operations. Do we still file?
Yes. Both annual forms are due whether or not the LLP traded, and the ₹100 per day per form additional fee runs from the due date. An LLP with no activity that skips a year is the most common way this fee gets large.
How is partner remuneration taxed?
Remuneration and interest paid to partners are deductible for the LLP only within limits and only if the LLP agreement actually provides for them. Anything outside that is disallowed. We check the agreement against what is being paid, which is the step usually skipped.
Is an LLP better than a Private Limited company?
For compliance load, an LLP is lighter, mainly on audit and meetings. For raising outside investment, a Private Limited company is usually what investors expect. We are not the right people to make that choice for you, but if you have already made it we will tell you exactly what it means in filings.
By business structure
Not quite you?
- Private Limited
The heaviest compliance load, and the one with the uncapped late fee.
- One Person Company
A company in every way that costs money, with a lighter annual return.
- Partnership Firm
No ROC at all. The tax work is where the money is won or lost.
- Proprietorship
You and the business are one taxpayer. Simplest structure, easiest to neglect.