How to avoid Late filing penalty for partnerships?

Do you hold a Limited Liability Partnership (LLP) with a corporation? Have you received late filing penalty mails? Confused what to do? Heres a few tips explaining exactly how you can handle the situation.

 Late filing penalties are imposed against LLP when their accounts are not filed in due time. The legislation issued several laws on the same matter:

  • LLP: Late Filing Penalties: Regulations 2008 SI 2008 497
  • LLP: Accounts and Audits: Regulations 2008 SI 2008/1911
  • LLP: Applications of companies Act: Regulations 2009 DI 2009/1804.

 Information on Late Filing Penalties

 Company delays to publish records for public convenience (shareholders etc) prompted the Parliament to design Late Filing penalties in 1992. It must be mentioned here that late filing penalties are only applicable to LLP accounts. All LLPs, trading/ non-trading entities are required to submit account reports on time. However, those that are exempted from audits need not file such information. Late submission is subjected to meet penalty charges.

 Charges are decided on the basis of first account holder and subsequent account holder.

First accounts, if they cover a period over 12 months then a trader is required to submit reports by 21 months of the day of joining or 3 months from the end of accounting orientation, which ever is longer.  Subsequent periods will require a trader to submit reports within 9months from the end of accounting orientation.

 The more you delay with the report the late fine charges surmounts; over 1 month – $150, between 1 to 3 months – $375, between 3 to 6 months – $750, over 6 months – $1500.

 How to Avoid such Penalties?

 The best way to avoid paying penalty is by submitting account report to a company on time. To keep from paying late filing penalty charges monitor a calendar. Remind your accountant on time to prepare report and scrutinize it properly. In case you are confused with the last filing date then consult the policy paper during middle term. If you can somehow guess that your report would not stand complete by the last date of submission you can apply for extension with the Companies House. However an extension is granted only on emergency events unanticipated by the LLPs or auditors.

 Late filing penalty can also be imposed on cases where the LLP has submitted a faulty account report. Compliance with legislation rules of procedure is a must.  If the authority returns your report, you need to correct it and then send it again to the Companies House. Correction will require time. This however won’t buy you a good excuse to avoid paying penalties. Therefore check through the report prior to submission.

 If you try to avoid paying penalty you might end up loosing everything, reputation mostly. Generally in such cases the concerned department engages debt collector to take proper action against the defaulter. Matters will be taken to the court and a special panel of jury will decide verdict.

 It is better to produce a timely report than getting involved in court affairs. This is why you must prepare quality documents and post them to Companies House in time.