advocatesadvise.com - LLP RULES 2009<br /> CHAPTER VII by Vijay Premchandani

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, workin-
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.
(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’.
(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.
(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.
25 (1) For the purposes of sub section (1) of section 35, every limited liability
partnership shall file an annual return with the Registrar in Form 11.
(2) The annual return of an LLP having turnover upto five crore rupees
during the corresponding financial year or contribution upto fifty lakh
rupees shall be accompanied with a certificate from a designated partner,
other than the signatory to the annual return, to the effect that annual
return contains true and correct information. In all other cases, the annual
return shall be accompanied with a certificate from a Company Secretary
in practice to the effect that he has verified the particulars from the books
and records of the limited liability partnership and found them to be true
and correct.
(3) The fees to be paid to the Registrar in pursuance of sub-section (1) of
section 35 for filing the annual return shall be as mentioned in Annexure
‘A’.
26. The documents to be kept by the Registrar under section 36 shall be
available in the registry on payment of fee as mentioned in Annexure ‘A’
for inspection by any person and for obtaining any certified copy thereof.