LLP Accounting

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Reading Time: 2 minutes| (Last Updated On: April 24, 2019)

LLP Accounting

LLP Accounting – Section 34 of the Limited Liability Partnership Act requires that every LLP shall maintain and keep the accounting records which sufficient to show and explain the transaction of an LLP and which discloses with reasonable accuracy the financial position of the LLP. Such a book of account needs to prepare on the accrual basis of cash basis and according to the double entry accounting system.

LLP Accounting

Following are the records which should be maintained at the registered office of the LLP:

  1. Entries from day to day of all sums of money received and expended by the LLP, and the matters in respect of which the receipt and expenditure take place.
  2. Records of the assets and liabilities.
  3. Statement of inventories.
  4. Statement of work-in-progress.
  5. Statement of finished goods.
  6. Statement of cost of goods sold and
  7. Other details which the partner may decide.

The financial year or an LLP starts from the date of its incorporation in case of a newly incorporated LLP and in other cases is start on 01st April and ends on 31st March every year. At the end of financial the designated partners are required to prepare an annual financial statement and the same need to certify it to be true. The books of account of the LLP is required to be kept and maintained at the registered office of the LLP for the period of 8 years.

Accountants Responsibility:-

  1. Maintenance of Books: – The most important role which an account must play is to ensure that the books of accounts are properly maintained and updated
  2. Receivable & Payable: – The payables must be paid within due date to avoid interest and loss of reputation; the receivable must be taken care of by way of reminders.
  3. Payroll & Labour Law: – Employee’s salary needs to be paid within the time after statutory deductions like Professional Tax, TDS, PF and ESIC contribution.
  4. Sales Tax Compliance: – Correct computation/working of vat payable after taking input tax in credit and filing of timely return is an important responsibility of accountant.
  5. Receivable & Payable: – The payables must be paid within due date to avoid interest and loss of reputation; the receivable must be taken care of by way of reminders.
  6. TDS Compliance: – While making payments to vendors, employees, contractors, rent, professional payments etc TDS must be deducted at applicable rates.
  7. Service Tax Compliance: – Every month the service tax need to be paid after taking a proper deduction of available service tax credit. The return must be filed within due date.

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