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Appointment of Auditor in LLP

Online Legal India LogoBy Online Legal India Published On 23 Jan 2021 Updated On 17 Jan 2023 Category Compliance

Every company has to undergo an audit of its accounts. Like any other companies, a Limited Liability Partnership (LLP) has also to do the same, as per the LLP Registration governed by the Limited Liability Partnership Act, 2008. Under LLP Act, Auditor and Audit Requirements in an LLP always has a certain threshold limit, above which an LLP has to audit its books of accounts.

This particular relaxation has actually encouraged many entrepreneurs in the country to opt for LLP Registration online.

Who is an Auditor?

An auditor is a qualified individual who is trained to review and verify the accounting data of a company. The person has to be recognised as a Chartered Accountant (CA) as per the Chartered Accountant Act 1949 and can be deemed as an Auditor.

What is the purpose of the appointment of the Auditor?

The main purpose of an Auditor in a company is to protect the interests of the shareholders of the company. The auditor is bound by the law to examine and maintain the accounts and update the directors about the financial state of the company.

Procedure for Appointment of Auditor

 1. LLP has to appoint an auditor for the purpose of audit of its accounts for every financial year.

2. Only a person or firm under the Institute of Chartered Accountants of India can be appointed as an Auditor.  

3. The designated partners and directors should conduct a general meeting for the appointment of the auditor and fix his remuneration.

 4. The existing auditor shall hold office until the new auditors are appointed in accordance with LLP Agreement.

Audit requirements in LLP

One of the benefits of LLP registration is that only those LLP, whose turnover or/and contribution exceeds the prescribed limit under the LLP rules are required to get its account audit by the practising chartered accountant also can be wind up easily.

The threshold provided under the rules for an audit of the accounts of an LLP:

If turnover > Rs 40 lacs in a financial year


Contribution > Rs 25 lacs in a financial year

Documents required for appointing an auditor in an LLP

  • Consent letter
  • A valid certificate from an auditor stating their eligibility to get appointed.
  • A resolution from an LLP

As no particular form is yet prescribed by the ministry, thus there is no need to intimate the ROC for an auditor appointment in an LLP.

Penalty for not appointing an auditor for an LLP

If any LLP does not appoint its auditor before the prescribed period than it shall be punishable with fine which shall not be less than Rs. 25,000 not exceeding Rs. 5,00,000. Every designated partner shall be punishable with fine which shall not be less than Rs. 10,000 not exceeding Rs. 5, 00,000.

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