Limited Liability Partnerships (LLP) is a type of business entity sharing features of a partnership firm and a company. LLPs are regulated by the Registrar of Companies, the Ministry of Corporate Affairs. An absolute legal entity separate from its partners and perpetual succession, some major benefits and powers enjoyed by LLPs are:
LLPs must maintain compliance and file certain statutory filing with the government (annually).
All LLPs are required to maintain proper books of account relating to its affairs each year on a cash or accrual basis. A double entry system of accounting must be maintained for the book of accounts at the registered office. The accounts of LLPs with a turnover of more than Rs. 40 lakhs or with a capital over Rs. 25 lakhs, must be audited by a Chartered Accountant.
Any LLP that does not comply with the provision of the Act is punishable with a hefty fine between Rs. 25,000 – Rs. 50,000. The designated partners can be punished with a Rs. 10,000 – Rs. 1,00,000 non-compliance penalty.