I received various enquiries about the applicable format of LLP Statement of Account and Solvency (Balance sheet). Regarding that I want to state some facts as under
1. As per Chapter VII ( Financial Disclosure) LLP Act 2008
Sec 34. Maintenance of books of account, other records and audit, etc.
—(1) The limited liability partnership shall maintain such proper books of account as may be prescribed relating to its affairs for each year of its existence on cash basis or accrual basis and according to double entry system of accounting and shall maintain the same at its registered office for such period as may be prescribed.
(2) Every limited liability partnership shall, within a period of six months from the end of each financial year, prepare a Statement of Account and Solvency for the said financial year as at the last day of the said financial year in such form as may be prescribed, and such statement shall be signed by the designated partners of the limited liability partnership.
(3) Every limited liability partnership shall file within the prescribed time, the Statement of Account and Solvency prepared pursuant to sub-section (2) with the Registrar every year in such form and manner and accompanied by such fees as may be prescribed.
(4) The accounts of limited liability partnerships shall be audited in accordance with such rules as may be prescribed: Provided that the Central Government may, by notification in the Official Gazette, exempt any class or classes of limited liability partnerships from the requirements of this sub-section. 15
(5) Any limited liability partnership which fails to comply with the provisions of this section shall be punishable with fine which shall not be less than 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 not be less than ten thousand rupees but which may extend to one lakh rupees.
Rule 24 of LLP rule 2009
Every limited liability partnership shall keep books of accounts which are sufficient to show and explain the limited liability partnership’s transactions and are such as to—
(a) disclose with reasonable accuracy, at any time, the financial position of the limited liability partnership at that time; and
(b) enable the designated partners to ensure that any Statement of Account and Solvency prepared under this rule complies with the requirements of the Act.
(2) The books of account shall contain—
(a) particulars of all sums of money received and expended by the limited liability partnership and the matters in respect of which the receipt and expenditure takes place;
(b) a record of the assets and liabilities of the limited liability partnership;
(c) statements of cost of goods purchased, inventories, work-in- progress, finished goods and cost of goods sold; and(d) any other particulars which the partners may decide.
(3) The books of account which a limited liability partnership is required to keep shall be preserved for eight years from the date on which they are made.
Thus on reading of the above Sections & rules related to prepration of Statement of Account and Solvency , understanding points are as under:-
a) There is no format prescribe by the act & rule book of LLP form prepration of any books, accounts & balance sheet of LLp
b) It is also not prescribe whether the balance sheet should be prepare in Verticle or horizontal format & with what Accounting Standars disclosure.
c) only one mandatory point is there that if Accounts are not audited LLp shall include following as note” the partners acknowledge their responsibilities for complying with the requirements of the Act and the Rules with respect to preparation of books of account” and a certificate in the form specified in Form 8.”
d) To my understanding in the absence of any format we should follow format as given in LLP form 8 as prescribed format & applicable accounting standards.
Any Suggestion in this regard is highly appreciated -
CAclubindia
