Books of Accounts and Audit of LLP

1. 11/06/2015 C.A. Vishnu Kr Tulsyan V.K.Tulsyan & Co.
Books of A/Cs
and
Audit of LLP

2. About LLP:
LLP,alegalformavailableworld-wide,nowintroducedin
IndiaandisgovernedbytheLimitedLiabilityPartnership
Act2008,witheffectfromApril1,2009
LimitedLiabilityPartnership(LLP)isacorporatebusiness
vehiclethatprovidesboththebenefitsofacompanyand
partnershipfirmi.e.limitedliabilityandallowsitsmembers
theflexibilityoforganizingtheirinternalstructureasa
partnershipbasedonamutuallyarrivedagreement.
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3. Books Of Accounts
Limited Liability Partnerships are also required to maintain
books of account in respect of their income and
expenditure. These books of account are required to be
kept at the registered office of the Limited Liability
Partnership unless the Partners decide otherwise as per
the terms of the LLP Agreement.
Thebooksofaccountshallcontain:
•Particulars of all sums of moneyreceived and expended
by the limited liability partnership and the matters in
respect of which the receipt and expenditure takes place;
•A record of the assetsand liabilities of the limited liability
partnership;
•Statements of cost of goodspurchased, inventories,
work-in-progress, finished goods and cost of goods sold;
and
•Any other particularswhich the partners may decide.
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4. Methods of Accounting
LimitedLiabilityPartnershipsarerequiredtomaintain
theirBooksofAccountoncashbasisoraccrualbasis
andaccordingtothedoubleentrysystemofaccounting.
CurrentlytheaccountingstandardsarenotapplicabletoLLP.
Financial Statements
LLP is required to prepare the following statement annually:
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A Balance Sheet To give a true and fair view of the State of affairs of the
LLP as at the end of financial year
An Income and Expenditure
Account
To give a true and fair view of the Income and
Expenditure of the LLP for a particular Financial Year.
Statement of Solvency It is in form of declaration by the LLP, that it will be able
to pay its debts in full as they become due in the normal
course of business.

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Statutory Audit of LLP

6. Statutory Audit Of LLP
•Limited Liability Partnership whose contribution exceedRs. 25
Lakhsor the Limited Liability Partnership whose turnover
exceedRs. 40 lakhsare required to annually get their accounts
audited by any Chartered Accountant in practice.
•The LLP, which are notrequired to get their accounts audited, are
required to In furnish a statement in the Statement of Account
and Solvencyby 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
•The Designated Partners responsible for the compliances of LLP
will appoint the auditoralso. However if the designated partner
fails to appoint the auditor then the partners may appoint the
auditor.
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7. Tax Audit Of LLP
Wherethetotalsales,turnoverorgrossreceipts
ofthebusinessexceedRs.100lakhs(Rs.25
lakhsincaseofprofession)inanyfinancialyear
ofthecompany,thantheaccountsshallbe
auditedbycharteredaccountantandtaxaudit
reportbasedonthesame,isrequiredtobe
submittedtothetaxauthorities’alongwiththe
ReturnofIncomeofthebusiness.
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8. Appointment
of
Auditors By DPs
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9. Appointment of Auditors By DPs
LLPshavetoappointAuditorforeachfinancialyearunlessit
isexemptfromaudit.Itcanappointmorethanoneauditors
forthepurpose.
TheDesignatedPartnersmayappointanAuditor:
i.Atanytimeforthefirstfinancialyear.However,the
appointmenthastobemadebeforetheendofthefirst
financialyear
ii.Within30daysbeforetheendofFinancialyear
iii.TofillacasualvacancyintheofficeofAuditor
iv.TofillupthevacancycausedbyremovalofanAuditor
Ifthedesignatedpartnershavenotappointedtheauditoras
statedabove,thenthepartnersmayappointtheAuditor.
OnlyCharteredAccountantscanbeappointedasAuditor.
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10. Remuneration
TheDPscanfixtheremunerationofthe
auditor.However,ifthereisanyspecific
provision regarding fixing remuneration in
the LLP agreement, then that provision has to be followed.
Removal of Auditor
TheAuditorcanberemovedbytheLLPbyfollowingthe
procedurelaidoutintheLLPAgreement.
IftheLLPAgreementissilentissilentabouttheremovalof
theAuditor,thenconsentofallthepartnersisrequiredto
removetheAuditor.
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Appointment of Auditors By DPs
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11. PENALTIES
Any LLP which fails to comply with the above stated
requirements for appointment of Auditors shall be
punishable with fine ONLY of
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i.Rs. 25,000 but not exceeding Rs. 5,00,000.
ii.EveryDPbe punishable with fine -not be
less than Rs. 10,000 but exceeding Rs.
1,00,000.

12. FormandContentoftheAUDITREPORT
i.StatementofAccount&Solvencyine-Form8.
ii.AnnualReturnine-form11.
TheDesignatedPartnerscanuploadthee-formsonthe
LLPportalathisconvenience.
CertificationfromPCS
IncaseofLLPswith
i.turnovermorethan5croresrupeesinafinancial
yearOR
ii.contributionmorethan50(fifty)lakhrupees,
iii.theAnnualreturnshallbecertifiedbyaPCS
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13. Filing Annual Accounts, Annual Return &
Income Tax Returns
Filing Annual Accounts
AllLLPs-FORM8tobefiledwiththeregistrarofLLPsonorbefore30
th
Octobereveryyear.
FilingAnnualReturn
EveryLLP-AnnualReturninFORM11totheRegistrarwithin60days
fromtheclosureoffinancialyeari.e.theAnnualReturnshastobefiled
onorbefore30
th
Mayeveryyear.
FilingIncomeTaxReturns
i.IncasewhereAuditisrequired-30
th
Septembereveryyear,
ii.WhereinbusinesswhichdonotfallundertheAuditrequirements
criteriawillhavetofileIncomeTaxReturnsonorbefore31
st
Julyevery
year.
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14. Penalty for NON -FILING
IfthereisdelayinfilingformNo.8and
11ofLLP-Rs.100perdaytillitis
complied.Youcannotcloseorwindup
yourLLPwithoutfilingAnnualAccounts.
So,ifitisnotfiledontime,yourLLPturns
intounlimitedstatutoryliabilitytilltheday
itiscomplied.
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15. Thank You!
CA Vishnu Kr Tulysan
[phone] / [email protected]
www.vktulsyan.com/
CA Vishnu Kr Tulsyan is practicing
Chartered Accountant & Company
Secretary with over 15 years of
exhaustive experience in the filed
of Finance, Accounts, Corporate
Compliance & Advisory, Regulatory
Changes Implementation.
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