Corporate and Other Laws · The Limited Liability Partnership Act, 2008

Financial Disclosures, Accounts and Audit of LLP under the LLP Act, 2008

Updated 4 October 2026 · Fact-checked

Under the LLP Act, 2008, an LLP keeps proper double-entry books, prepares a Statement of Account and Solvency within six months of year end, files it with the Registrar, files an annual return within sixty days, and gets accounts audited as prescribed. Default attracts penalties or fines.

Understand Financial Disclosures, Accounts and Audit of LLP

An LLP is a body corporate, so the public must be able to see its financial position. The Act therefore makes the LLP keep books, report its accounts and solvency, and file an annual return. Sections 34 and 35 hold most of these rules.

Books of account (s 34(1)). The LLP must keep proper books of account of its affairs for each year of its existence. It may use the cash basis or accrual basis, but the system must be double entry. Books are kept at the registered office for the prescribed period. The form of books and the period are set by the rules.

Statement of Account and Solvency (s 34(2) and (3)). Within six months from the end of each financial year, the LLP prepares this statement as at the last day of that year, in the prescribed form. It is signed by the designated partners. The LLP then files it with the Registrar within the prescribed time, in the prescribed form and manner, with the prescribed fee. The statement tells the Registrar whether the LLP can pay its debts.

Annual return (s 35). Every LLP files an annual return, duly authenticated, with the Registrar within sixty days of closure of its financial year, in the prescribed form and manner with the prescribed fee. In practice, these are filed in Form 11 (annual return) and Form 8 (Statement of Account and Solvency). The form numbers come from the rules, not the Act.

Audit (s 34(4)). The accounts are audited in accordance with the rules. The Central Government may, by notification, exempt any class of LLPs from audit. The turnover and contribution limits for audit come from the rules, not the Act, so state them as rule-based and do not quote a section for them.

Inspection and enforcement. Under s 36, the incorporation document, names of partners, Statement of Account and Solvency and annual return are open to inspection by any person on payment of the prescribed fee. Late filing is allowed on payment of additional fee under s 69. Under s 41, the Tribunal can order a defaulting LLP to make good a filing default.

Key rules to remember

Books of account: Proper books | cash or accrual basis | double entry | kept at registered office | s 34(1); Period of retention and form of books are prescribed by rules.
Statement of Account and Solvency: preparation: Prepare within 6 months from end of financial year, as at last day of that year; signed by designated partners | s 34(2); Filed with Registrar within prescribed time under s 34(3). Commonly filed in Form 8.
Annual return: File within 60 days of closure of financial year | s 35(1); Commonly filed in Form 11. Authenticated, with prescribed fee.
Audit: Accounts audited as per rules | s 34(4); Central Government may exempt classes of LLPs; Audit thresholds are in the rules, not the Act.
Penalty for late filing under s 34(3) and s 35: ₹100 per day of default; maximum ₹1,00,000 for the LLP and ₹50,000 for each designated partner; Applies to s 34(5) (late filing of Statement of Account and Solvency) and s 35(2) (late annual return).
Fine for default under s 34(1), (2) and (4): LLP: ₹25,000 to ₹5,00,000. Every designated partner: ₹10,000 to ₹1,00,000 | s 34(6); Applies to failure to keep books, prepare the statement, or get accounts audited.
Winding up for non-filing: Default in filing Statement of Account and Solvency or annual return for any 5 consecutive financial years | s 64(e); Tribunal may wind up the LLP.

How to solve Financial Disclosures, Accounts and Audit of LLP questions

Most questions give a fact pattern with a date or a default and ask for the duty, deadline or consequence. Use this order.

1Identify which duty is involved: books (s 34(1)), Statement of Account and Solvency (s 34(2) and (3)), annual return (s 35), or audit (s 34(4)).
2Fix the financial year end, then count the period: six months for preparing the statement, sixty days for the annual return.
3Check who must sign: the designated partners sign the Statement of Account and Solvency.
4Decide whether the default is in filing (s 34(3) or s 35) or in compliance with s 34(1), (2) or (4), because the consequence differs.
5Apply the right consequence: daily penalty with caps for late filing, or fine with minimum and maximum for the other defaults.
6Mention the relief or follow-up: late filing with additional fee (s 69), Tribunal order (s 41), winding up for five consecutive years (s 64(e)).
7Write a conclusion in one line that answers the exact question asked.

Quickest way: Remember the clocks and the amounts

When to use it: Use this for MCQs and short written answers where you must recall the time limit or penalty fast.

Remember two clocks: 6 months to prepare the statement and 60 days for the annual return.
Remember the filing penalty as ₹100 a day, capped at ₹1,00,000 for the LLP and ₹50,000 per designated partner.
Remember the fine as 25,000 to 5,00,000 for the LLP and 10,000 to 1,00,000 for each designated partner.
In MCQs, eliminate options that mix up the two clocks or the two sets of amounts.
In written answers, use the format: provision, facts, conclusion, and cite s 34 or s 35 to earn step marks.

Common mistakes in Financial Disclosures, Accounts and Audit of LLP

Saying the Statement of Account and Solvency must be filed within six months.
The six months in s 34(2) is for preparing it. Students merge preparation and filing.
Fix: Say: prepare within six months; file within the prescribed time under s 34(3).
Stating the annual return is due in sixty days from the AGM or the statement date.
Company law uses AGM-linked dates, and students carry that over. An LLP has no AGM.
Fix: Count sixty days from the closure of the financial year.
Writing that the Act itself fixes the audit turnover limit.
Students memorise the limits and attach them to s 34.
Fix: Section 34(4) only says audit is as per the rules and that the Central Government can exempt classes. Give limits as rule-based.
Mixing up the penalty and the fine.
Both are monetary and both appear in s 34.
Fix: Late filing under s 34(3) or s 35 gives a daily penalty. Failing s 34(1), (2) or (4) gives a fine with a minimum and a maximum.
Forgetting that designated partners are also liable.
Students focus on the LLP as the defaulter.
Fix: State the amount for the LLP and the separate amount for every designated partner.
Saying that only cash basis or only accrual basis is allowed.
Students link accrual to companies.
Fix: An LLP may choose cash or accrual, but the system must be double entry.

Worked examples

Example 1

Alpha LLP has a financial year ending 31 March. It files its Statement of Account and Solvency 40 days after the prescribed time and the annual return 50 days late. Advise on the consequences for the LLP, assuming no other default.

Show the solution

Both are filing defaults, under s 34(3) and s 35(1).
Section 34(5) and s 35(2) impose a penalty of ₹100 per day of default on the LLP and its designated partners.
For the statement: 40 days × ₹100 = ₹4,000.
For the annual return: 50 days × ₹100 = ₹5,000.
Each total is far below the caps of ₹1,00,000 for the LLP and ₹50,000 for each designated partner, so the caps do not apply.
Late filing is allowed on paying the additional fee under s 69, without prejudice to other action.

Answer: The penalty is ₹4,000 for the statement default and ₹5,000 for the annual return default, applying to the LLP and its designated partners, and the late documents can be filed with the additional fee under s 69.

Example 2

Beta LLP did not prepare any Statement of Account and Solvency for the year and did not get its accounts audited, though the rules required audit. State the legal consequence.

Show the solution

Section 34(2) requires preparation of the statement within six months of year end, and s 34(4) requires audit as per the rules.
Failure to comply with s 34(1), (2) or (4) falls under s 34(6).
The LLP is punishable with fine of not less than ₹25,000 but up to ₹5,00,000.
Every designated partner is punishable with fine of not less than ₹10,000 but up to ₹1,00,000.
This is a fine for non-compliance, not the daily penalty, which relates to late filing under s 34(3).

Answer: Beta LLP faces a fine of ₹25,000 to ₹5,00,000, and each designated partner faces a fine of ₹10,000 to ₹1,00,000 under s 34(6).

Exam tips

Learn the two clocks (six months, sixty days) and the two amount sets (daily penalty with caps, fine with range). MCQs test these directly.
In written answers, name the section and then apply it to the facts; this earns step marks.
Do not give audit thresholds as part of the Act. Say they are prescribed by rules.
Check who is liable: the LLP and the designated partners, each with separate amounts.
Link s 64(e) to non-filing for five consecutive years when a question asks about the long-term consequence.

Practice questions from The Limited Liability Partnership Act, 2008

Financial Disclosures, Accounts and Audit of LLP in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

CMA IntermediateFinancial Disclosures, Accounts and Audit of LLP

Financial Disclosures, Accounts and Audit of LLP: frequently asked questions

What is the due date for LLP annual return Form 11?

Section 35(1) requires the annual return within sixty days of the closure of the financial year. The form and fee are prescribed by rules. Late filing attracts a penalty of ₹100 per day under s 35(2).

What is the Statement of Account and Solvency (Form 8)?

It is a statement of the LLP's accounts and solvency as at the last day of the financial year. It is prepared within six months of year end and signed by the designated partners. It is then filed with the Registrar within the prescribed time.

What is the audit turnover limit for an LLP?

The Act does not fix it. Section 34(4) says accounts are audited in accordance with the rules, and the Central Government may exempt classes of LLPs. Check the current rules for the contribution and turnover limits.

Can an LLP use cash basis accounting?

Yes. Section 34(1) allows the cash basis or accrual basis, but the books must follow the double entry system. They are kept at the registered office.

What happens if an LLP does not file for years?

Penalties accrue daily, subject to caps. Under s 64(e), the Tribunal may wind up an LLP that defaults in filing the Statement of Account and Solvency or annual return for any five consecutive financial years.