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FIRST COMPLIANCES FOR A NEW LIMITED LIABILITY PARTNERSHIP

A newly registered Limited Liability Partnership (LLP) has to complete certain compliances, preferable within the first 30-60 days of incorporation:

 

  1. Applying for a Permanent Account Number (PAN) – Unlike for Companies, Ministry of Corporate Affairs (MCA) does not allot a PAN automatically to a new LLP while incorporation. Hence, a LLP has to, immediately after incorporation, apply for a PAN. 

Once the income tax department allots a PAN to the LLP, the LLP has to also register with the income tax online portal.

Note: Most other registrations like Goods and Service Tax (GST), Import Export Code (IEC) and Professional Tax registrations are PAN based and hence LLP has to immediately obtain a PAN (You can read here)

 

  1. Execution of the LLP Deed and filing Form 3: The partners have to execute an LLP Deed and file Form 3 with the Registrar of Companies within 30 days of incorporation.

The LLP deed has to be adequately stamped – Stamp duty depends on

  • the state/ union territory where the partners have executed the LLP Deed (usually the state of the registered office address of the LLP)
  • the initial capital contribution

The LLP Deed is the foundation laying document of any LLP and partners have to carefully draft it.

 

  1. Applying for a Tax Deduction Number (TAN) – MCA also does not allot a TAN automatically to a new LLP while incorporation. But in certain respects, a TAN maybe required even before a PAN because tax deduction provisions are immediately applicable to a LLP for all its expenses from day one.

 

  1. Opening a current account with a bank and deposit of initial capital – Once the LLP receives the PAN card, it should immediately open a bank account and the Partners should immediately deposit the agreed initial capital contribution.

Note: One of the questions while filing the annual return of LLP is – Whether the partner has deposited the agree capital contribution?

 

  1. Professional Tax Enrollments (PTEC): Unlike GST and Import Export Code (IEC), which can be voluntary and depend on specific business requirements, a PTEC can be mandatory for an LLP in certain states and union territories.

 

  1. Other registrations: There can be other state and local level registrations at various level like shop and establishment, labour welfare registrations etc. Usually they depend on certain threshold like number of employees. You can read here

Corporate Compliance Team at Entrecap Business Services has wide experience in incorporating LLPs and completing the initial compliances seamlessly.

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