By Lal Singh A Limited Liability Partnership (LLP) is a popular business structure in India because it provides the advantages of both a company and a partnership. One common question asked by business owners is — “When does an LLP need to get its accounts audited?”
The answer depends mainly on capital (contribution) and annual turnover.
When Is an LLP Audit Mandatory?
As per the LLP Act, 2008 and LLP Rules, audit of accounts becomes compulsory in the following cases:
| Condition | Audit Required? |
| Total Capital/Contribution is more than ₹25 lakh | Yes |
| Annual Turnover is more than ₹40 lakh | Yes |
| Capital ≤ ₹25 lakh and Turnover ≤ ₹40 lakh | No audit required |
So, if your LLP’s capital (partner contribution) exceeds ₹25 lakh, then you must get the accounts audited by a Chartered Accountant (CA).
What Is Meant by “Capital” or “Contribution” in LLP?
In LLPs, capital is not called “share capital” like in companies. Instead, it is called partner contribution and may include:
- Cash contributions
- Property or assets contributed
- Services or skills (if permitted in LLP agreement)
- Converted loans or existing assets contributed by partners
If the total value of all partner contributions is more than ₹25 lakh, an audit becomes compulsory.
Example for Better Understanding
| LLP Contribution | Annual Turnover | Audit Required? |
| ₹18 lakh | ₹35 lakh | No |
| ₹30 lakh | ₹10 lakh | Yes – Contribution > ₹25 lakh |
| ₹15 lakh | ₹50 lakh | Yes – Turnover > ₹40 lakh |
| ₹5 lakh | ₹90 lakh | Yes – Turnover > ₹40 lakh |
Even if the LLP is not making profit, but capital or turnover crosses the limit, audit becomes mandatory.
Who Can Do the Audit?
Only a Practicing Chartered Accountant (CA) or a CA firm can audit an LLP’s books of accounts and issue an audit report.
What If the LLP Does Not Get Audited?
If an LLP does not audit its accounts even when required by law:
- Penalty of ₹100 per day of delay (no maximum limit)
- Problems in filing Form 8 and Form 11 (Annual Statements)
- Legal action or compliance notices from the Ministry of Corporate Affairs (MCA)
- Issues during loan applications, tenders, or investor checks
Documents Required for LLP Audit
To complete the audit process, the CA requires:
- LLP Agreement
- Partner contribution details
- Books of accounts (Cash book, ledger, purchase/sales records)
- Bank statements & vouchers
- GST, TDS and income tax filings (if applicable)
- Previous year audit reports (if any)
Final Summary
- Minimum capital for mandatory audit of LLP = More than ₹25 lakh.
- Even if capital is less, but turnover is more than ₹40 lakh – audit is required.
- Below these limits, audit is optional, but maintaining proper financial records is still important.