LLP provides the benefits of both less legal formalities and a corporate entity form. LLP is audited in accordance with the rule 24 of LLP, RULES 29. LLPs are required to maintain proper books of accounts- cash basis or accrual basis. The book of accounts must be maintained at the office of the registrar. At the end of the financial year the LLPs are required to prepare their financial statements within 6 months for filing with the ROC.

Audit Requirement of LLP

Account Submission and Maintenance

Obliged to maintain the accounts annually of the day-to-day affairs. Given under the section 609 of the COMPANIES ACT 2013, REGISTRARS OF COMPANIES are primarily responsible for getting the companies and LLPs registered under the act. Such registration implies that a certain company or entity is obligated to follow the rules mandated under the act. Any state union territory the compliance of rules is overlooked by this statute law.

Exemption from Audit to LLP

Accordingly, if companies have turnover of up to INR 25 lakhs annually the they are not obliged to file for the auditing of LLPs but in case if they want to get it done, they can get their accounts audited as per the rules of LLP. LLPs are mandated to appoint an auditor for LLP account within one month before the financial year end.

Appointment of Auditors

Auditor appointed by the designated partner

  • Any time but before the end term of the financial year
  • Within one month of the end of financial year
  • This can be done to fill a general vacancy in the office of auditor or to fill a vacancy caused by the auditor’s removal.

Auditor appointed by the partners

Partners are allowed to resume the responsibility of appointing the auditor on behalf of the company if the designated partners have not done so.

Annual Returns

Every LLPs are required to file an annual return with ROC within 2 months of the end of the financial year in the form 11.

Penalty

Penalties can be attracted if any of the changed events are not being filed with the registrar- addition of shares, change of directorship, paid up capital, transfer of shares, accounts closed or opened etc. e-form 20B states the penalty as-

Normal fee INR 300/-

up to 30 days                    2 times i.e., INR 600

up to 60 days                    4 times i.e., INR 1200

up to 90 days                    6 times i.e., INR 1800

more than 90 days          9 times i.e., INR 2700

 

Required Documents for Audit of LLP

RULE 24 of LLP rules 2009 defines the rules for auditing the account of LLP every year. The documents needed are:

Incorporation documents

  • Partners name change should be mentioned to the registrar if done so.
  • Statement of account and insolvency

Annual returns

  • Fee structure for examination is under section 36 of the rules.

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