Rule 24 - Maintenance of books of account, other records and audit, etc. - Limited Liability Partnership Rules, 2009

CHAPTER VII Financial Disclosures 24 (1) Every limited liability partnership shall keep books of accounts which are sufficient to show and explain the limited liability partnership's transactions and are such as to- (a) disclose with reasonable accuracy, at any time, the financial position of the limited liability partnership at that time; and (b) enable the designated partners to ensure that any Statement of Account and Solvency prepared under this rule complies with the requirements of the Act. (2) The books of account shall contain- (a) particulars of all sums of money received and expended by the limited liability partnership and the matters in respect of which the receipt and expenditure takes place; (b) a record of the assets and liabilities of the limited liability partnership; (c) statements of cost of goods purchased, inventories, work-in-progress, finished goods and cost of goods sold; and (d) any other particulars which the partners may decide. (3) The books of account which a limited liability partnership is required to keep shall be preserved for eight years from the date on which they are made. (4) For the purposes of sub-section (3) of section 34, every limited liability partnership shall file the Statement of Account and Solvency in Form 8 with the Registrar, within a period of thirty days from the end of six months of the financial year to which the Statement of Account and Solvency relates. 1 [ Provided that if a limited liability partnership has closed the financial year on the 31st March, 2011, it shall file the Statement of Account and Solvency in Form 8 with the Registrar, within a period of sixty days from the end of six months of the financial year to which the Statement of Account and Solvency relates ] (5) The fees to be paid to the Registrar in pursuance of sub-section (3) of section 34 for filing the Statement of Account and Solvency shall be as mentioned in Annexure 'A'. 2 [ (6) Statement of Account and Solvency shall be signed on behalf of the limited liability partnership by its designated partners. Where the corporate insolvency resolution process has been initiated against the limited liability partnership under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) or the Limited Liability Partnership Act, 2008 (06 of 2009) has come under liquidation under the said Code, 2016 or the said Act, 2008, the said Statement of Account and Solvency may be signed on behalf of limited liability partnership by interim resolution professional or resolution professional, or liquidator or limited liability partnership administrator. ] (7) The Statement of Account and Solvency of a limited liability partnership shall be signed by the designated partners of the LLP and each designated partner shall be taken to be a party to its approval unless he shows that he took all reasonable steps to prevent their being approved and signed. (8) The accounts of every limited liability partnership shall be audited in accordance with these rules: Provided that a limited liability partnership whose turnover does not exceed, in any financial year, forty lakh rupees, or whose contribution does not exceed twenty-five lakh rupees shall not be required to get its accounts audited: Provided further that if partners of such limited liability partnership decide to get the accounts of such LLP audited, the accounts shall be audited in accordance with these rules: Provided also that where the partners of such LLP do not decide for 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 specified in Form 8. (9) A person shall not be qualified for appointment as an auditor of a limited liability partnership unless he is a Chartered Accountant in practice. (10) An auditor or auditors of a limited liability partnership shall be appointed for each financial year of the LLP for auditing its accounts. (11) The designated partners may appoint an auditor or auditors- (a) at any time for the first financial year but before the end of the first financial year, (b) at least 30 days prior to the end of the each financial year (other than the first financial year), (c) to fill a casual vacancy in the office of auditor, including in the case when the turnover or contribution of a limited liability partnership exceeds the limits specified under sub-rule (8), or (d) to fill up the vacancy caused by removal of an auditor. (12) The partners may appoint an auditor or auditors where the designated partners have power to appoint under sub-rule (11) and have failed to appoint. (13) An auditor or auditors of an LLP shall hold office in accordance with the terms of his or their appointment and shall continue to hold such office till the period - (a) the new auditors are appointed, or (b) they are re-appointed. (14) Where no auditor has been appointed under sub-rule (11), any auditor in office shall be deemed to be re-appointed, unless - (a) the limited liability partnership agreement requires actual reappointment, or (b) the majority of partners have determined that he should not be re-appointed and have given a notice to this effect to the LLP. (15) Provisions of sub-rule (14) shall be applicable without prejudice to the provisions of the rules relating to removal and resignation of auditors under this chapter. (16) A notice specified under clause (b) of sub-rule 14 - (a) may be in hard copy or electronic form, and (b) must be authenticated by the person or persons giving it. (17) The remuneration of an auditor appointed by the limited liability partnership may be fixed by the designated partners or by following the procedure as laid down in the limited liability partnership agreement. (18) (a) The partners of a limited liability partnership may remove an auditor from office at any time by following the procedure as laid down in the limited liability partnership agreement. (b) Where the limited liability partnership agreement does not provide for removal of an auditor, consent of all the partners shall be required for removal of the auditor from his office. (19) (a) An auditor of an LLP may resign his office by depositing a notice in writing to that effect at the LLP's registered office. (b) Where an auditor is unwilling to be re-appointed, he shall give a notice in writing to that effect at the LLP's registered office, not less than 14 days before the end of the time allowed for appointing the new auditor. (c) The notice under clause (a) or (b) is not effective unless it is accompanied by the statement of the circumstances connected with his ceasing to hold office. (d) The auditor's term comes to an end as on the date on which the notice is deposited or on such later date as may be specified in the notice. -------------------------- Notes :- 1. Inserted vide F. No. 2/17/2011-CLV - Dated 4-11-2011 2. Substituted vide Notification No. G.S.R. 173(E) dated 04-03-2022 before it was read as (6) A limited liability partnership's Statement of Account and Solvency shall be signed on behalf of the limited liability partnership by its designated partners.