Annual Compliance of LLP: Form 8 Statements of Accounts and Solvency

Annual Compliance of LLP: Form 8 Statements of Accounts and Solvency

Annual Compliance of LLP Form 8 Statements of Accounts and Solvency

Every Limited Liability Partnerships required to file their Statements of Accounts and Solvency within 30 days after expiry of 6 months from end of the Financial Year i.e. on or before 30th Oct of Assessment Year and the Annual Return in Form 11 is to be filed on or before 30th May of the assessment year.

This article covers the requirements for filing the Form 8 – Statements of Accounts and Solvency. Also, we have given in brief here, the important aspects to note while filing Form 8.

What is Form 8 (E-Form 8)?

Form 8 is Statement of Accounts and Solvency. It reflects the financial transactions undertaken thought the financial year and also the financial position during the year. A part from these LLP must declare its Turnover whatever achieved during the financial year, that the partners and designated partners have taken due diligence and care for the business activities undertaken, and that there has been any modifications, amendment or change in activity etc. during the year and relevance compliances have been fulfilled previously and no compliance is due on part of LLP.

Form 8 is a statement filed by partners for the declaration of solvency of the partners that they are capable in meeting the liabilities and sound to repay the debts and outstanding amounts. Form 8 is divided into two parts that is Part A and B. Part A is for financial information of the LLP and Part B is for creations or modification of Charge.

When it is required to file Form 8?

Any LLP incorporated from 1st October to 31st March during the financial are not required to close their accounts on 31st March and no need to file form 8 other than those all are required to file form 8 till 30th October every year, it is important to keep in mind that form 8 once file can’t be revised.

Let’s understand it with the help of following examples:

  1.  XYZ TECH LLP was incorporated on 1st of June 2021 and did not conduct any business activity during the year 2021-22. The LLP is liable to file its Annual returns and complete all the compliances.
  2. XYZ SOFTTECH LLP was incorporated on 1st of October 2021 and conducted some business activity during the year 2021-22. The LLP is not liable to file its annual returns as complete all the compliances.

Details required before filing of Form 8

  1. Audited Financial Statements
  2. Declaration by partners about solvency
  3. Declaration of Charge created during the financial year

Attachments required for filing Form 8

  1. Financial Statement of LLP
  2. Disclosure under Micro, Small and Medium Enterprises Development Act, 2006 is mandatory.
  3. If there are any contingent liabilities, statement of contingent liabilities must be attached.
  4. Any other information.

Signature of Partners & Chartered Accountant

Form 8 must be digitally signed by a minimum of two Designated Partners of LLP or Authorized Representative of Foreign LLP. Further, if the total turnover of the LLP exceeds Rs. 40 lakhs or partner’s obligation of contribution exceeds Rs. 25 lakh, in such a case Form 8 should be certified and digitally signed by the auditor.

Government fee of Form 8

Fee for filing of the Form 8 for Indian LLP depends upon the capital contribution of the LLP and could be understood from the below table:

S.noContribution of LLPFiling fees of Form 8
1.Up to INR 1 LakhsINR 50
2.More than INR 1 Lakhs up to INR 5 LakhsINR 100
3.More than INR 5 Lakhs up to INR 10 LakhsINR 150
4.More than INR 10 LakhsINR 200

For a Foreign LLP filing fee of Form 8 is INR 1000.

Consequences of Non-filing of Form 8

Form 8 must be filed within due time on or before 30th October, failure in filing would lead for penalties. Earlier there was a penalty of Rs. 100/- each day during the period of delay which was amended by The Limited Liability Partnership (Amendment) Rules, 2022 and will be effective from 1st of April 2022.

Late fee for delayed filing of E-form 8 as per new amended LLP Rules 2022 are as follows:

S.noDelayed periodPenalty for Small LLPPenalty for other than Small LLP
1Upto 15 daysRs. 50Rs. 50
2More than 15 days and upto 30 daysRs. 100Rs. 200
3More than 30 days and upto 60 daysRs. 200Rs. 400
4More than 60 days and upto 90 daysRs. 300Rs. 600
5More than 90 days and upto 180 daysRs. 500Rs. 1000
6More than 180 days and upto 360 daysRs. 750Rs. 1500
7More than 360 daysRs. 750 + (Total days of delay – 360 days) x Rs. 10Rs. 1500 + (Total days of delay – 360 days) x Rs. 20

Penalty on LLP for Non-filing

A fine of Minimum Rs 25,000 is imposed on the LLP which can be extended up to Rs. 5, 00,000

Penalty for Designated Partners

All designated partners will be charged with a fine of minimum of Rs 10,000 and with a maximum cap of Rs. 1, 00,000.

Note: One can’t close or windup the LLP without closing and filing of the accounts.