CA Shivani Agarwal

What is LLP

LLP is a way between Company and Partnership. It takes into account the benefits of both i.e. less legal and regulatory formalities as compared to Company and a Corporate Entity form which is not in the case of Partnership.

Exemption from Audit

Rule 24(8) exempt the LLP from the Audit of its accounts if its turnover does not exceed, in any financial year, Rs. 40 lakhs or its contribution does not exceed Rs. 25 Lakhs. Appointment of Auditors

LLPs have to appoint auditor within 30 days before the end of the financial year. In other words auditor has to be appointed before 1st March every year.

Appointment by designated Partners

The designated partners may appoint an auditor:

  1. At any time for the first financial year but before the end of the Financial Year.
  2. Within 30 days before the end of the Financial Year.
  3. To fill a casual vacancy in the office of auditor.
  4. To fill up the vacancy caused by removal of an auditor.

Appointment by Partners

If the designated partners have not appointed then the Partners can assume this responsibility.

Who can be appointed

Only Chartered Accountant

Holding Office

An Auditor shall hold office from the day the previous auditor cease to hold office and upto the end of the next period for appointing auditor unless re-appointed.

Penalty

Any LLP which fails to comply with the requirements shall be punishable with fine which shall not be less than Rs. 25,000 but not exceeding Rs. 5,00,000. Every designated partner shall be punishable with fine which shall not be less than Rs. 10,000 but exceeding Rs. 5,00,000.

(Author can be reached at shivani@akvassociate.com)

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Category : Company Law (3885)
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Tags : Audit (452) LLP (221)

2 responses to “Statutory Audit Provisions of Limited Liability Partnership”

  1. Eddie says:

    our capital contribution is very less and turnover is also less than mentioned limits. w have not appointed auditor yet. it has been more than an a year since we incorporated, but haven’t started any business yet. however, we have filed form 8 and form 11. in this case we dont have to appoint auditor right? please advise… second thing: we are not sure whether we filed e form-3. is there a way to check this? please advise…

  2. Pratibha says:

    May I know the limit for llp also increased for audit..

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