What is LLP Audit ?

Limited Liability Partnership is combination of Company & Partnership firm. LLP is required to maintain its annual books of account. LLP shall keep books of account at its registered office or partner mutually decide same. LLP can maintain books of account on cash or accrual basis. Financial statement consist of LLP Balance sheet , Income & Expenditure statement. LLP statutory audit is applicable for Every LLP whose turnover exceed Rs.40 lakhs or whose contribution exceed Rs.25 lakhs in any financial year.

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LLP Auditor Appointment

LLP Who’s turnover exceed prescribed limit Rs..40 lakhs or whose contribution exceed Rs.25 lakhs in any financial year shall appoint LLP Auditor. The LLP auditor must be Practicing Chartered Accountant. Where LLP turnover or capital contribution no crossing given LLP , LLP audit is not mandatory. LLP partners can take mutual decision for auditor appointment.

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LLP Audit requirement under LLP Act 2008

per Section 34(4) of the Act there is LLP audit requirement. turnover exceed prescribed limit Rs..40 lakhs or whose contribution exceed Rs.25 lakhs in any financial year.

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LLP Tax Audit requirement under Income Tax Act 1961

Every LLP whos turnover cross as per Section 44 AB of Income Tax Act 1961 , shall required to get LLP Tax Audit. Chartered Account firm shall conduct LLP Tax audit.  if its turnover crosses limit under business is Rs. 1 Cr and in case of Professional Services sales Rs. 50 lac. Tax audit is statutory obligation.

Read Article For LLP Tax Audit

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Do I Need to Change LLP Auditor ?

Under Companies Act 2013 there is specific requirement to change statutory auditor of company at certain interval. However in LLP Act 2008 there is no specific guideline to change auditor. LLP Partners can take mutual decision for LLP auditor appointment / removal / reappointment.

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LLP Audit Report Format

In case Private Limited Company , there is specified Audit Report format. However in LLP Act 2008 , there is no specified LLP audit report format. LLP Audit Report contain detail as below

• Name of LLP & Registration Number
• LLP Audit Period
• Scope of Audit 
• Management Responsibility 
• Audit Opinion 
• Auditor Name & Firm Details

Read About LLP Audit Report Format 

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LLP Audit Section

LLP Audit is applicable as per Section 24(8) in The Limited Liability Partnership Rules, 2009. 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. As per this Section LLP Statutory audit is applicable.

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LLP Audit Due Date

LLP Audit due date for FY 2019-20 is 30 September 2020. Same due date shall be applicable for LLP Income Tax Return filing. For FY 2019-20 by 30 September 2020 LLP shall get books of account audited.

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Penalty LLP Audit Non Compliance

Any LLP where audit is applicable and fails to conduct LLP audit penalty shall be applicable as per Section 35 of LLP Act 2008. LLP as well as designated partners are liable to a 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.

• Penalty on LLPRs. 25,000 but not exceeding Rs. 5,00,000.
• Penalty on Designated Partner not be less than Rs. 10,000 but exceeding Rs. 1,00,000
• LLP Tax Audit Penalty upto Rs. 1,50,000/-

 

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