Unlike Companies, Limited Liability Partnerships are not required to get books of accounts audited compulsorily irrespective of turnover or profits. Whereas, LLPs is required to get their books of accounts audited, only if they cross certain turnover limit, or when the total capital contribution of partners exceeds a certain limit. The following write up would help in understanding the audit requirements of LLPs in India.
LLP’s liable for audit
Only the LLP whose turnover exceed Rs. 40 Lakh or whose contribution exceed Rs. 25 Lakh are required to annually get their accounts audited by any Chartered Accountant in practice. So, all other LLP’s are exempted from mandatory audit of their accounts.
LLP’s who are exempted from mandatory audit may also get their accounts audited but if the partners of such LLP want to get the accounts of such LLP audited, the accounts shall be audited only in accordance with the Limited Liability Partnership Rules, 2009.
Relaxation to LLPs
Provided further LLP’s who are mandatory required to get their accounts audit but the partners of such LLP decided not to get audit of the accounts of the LLP, such LLP shall include in the Statement of Account and Solvency a statement by the partners to the effect that the partners acknowledge their responsibilities for complying with the requirements of the Act and the Rules with respect to preparation of books of account and a certificate in the Form 8.
Moreover, like Companies an auditor or auditors of a LLP shall be appointed for each financial year of the LLP for auditing its accounts.
Penalty on Non-compliance
In case of non- compliance of the above rules, LLP as well as designated partners are liable to penalty for contravention. LLP shall be punishable with fine which shall be minimum of twenty-five thousand rupees but which may extend to five lakh rupees and every designated partner of such limited liability partnership shall be punishable with fine which shall be minimum of ten thousand rupees but which may extend to one lakh rupees.
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