Whether audit of all LLP’s would be mandatory
The accounts of every limited liability partnership shall be audited in accordance with Rule 24 of LLP Rules, 2009.
LLP’s are required to have its accounts audited by a practicing chartered accountant if its turnover exceeds in any financial year exceeds Rs. 40 Lakhs or whose contribution exceeds Rs. 25 Lakhs. If the Turnover or contribution is less than the prescribed limits then LLP shall not be required to get its accounts audited. However, if the partners of such limited liability partnership decide to get the accounts of such LLP audited, the accounts shall be audited only in accordance with such rules.
Provided further that where the partners of such LLP decided not to get audit of accounts of LLP, then 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 o accounts and a certificate in the form specified in Form 8.
Qualification for appointment as auditor
A person shall not be qualified for appointment as an auditor of a limited liability partnership unless he is a Chartered Accountant in practice.
Appointment of Auditor
An auditor or auditors of a limited liability partnership shall be appointed for each financial year of the LLP for auditing its accounts.
The designated partners may appoint an auditor or auditors
- At any time for the first financial year but before the end of the first financial year.
- At least 30 days prior to the end of the each financial year (other than the first financial year).
- To fill a casual vacancy in the office of the auditor.
- To fill up the vacancy caused by removal of an auditor.
If the designated partners have not appointed then the partners may appoint an auditor or auditors.
Holding of Office
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 new auditors are appointed or they are re-appointed.
Where no auditor has been appointed, an auditor in office shall be deemed to be re-appointed, unless the LLP agreement required the actual re-appointment or the majority of partners have determined that he should not be re-appointed and have given a notice to this effect to the LLP.
Penalty for Non-compliance
Any LLP who 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. Also the every designated partner shall be punishable with fine which shall not be less than Rs. 10,000 but not exceeding Rs. 1,00,000.