Chapter VII - Financial Disclosures
Section 34
Section 34: LLP accounts, solvency statement and audit
An LLP must keep prescribed books, prepare and file an annual Statement of Account and Solvency, and comply with the audit rules unless exempt.
On this page
Need advice on Section 34?
This article is for general information. Refer to the Limited Liability Partnership Act, 2008 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(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.
(5) Any limited liability partnership which fails to comply with the provisions of sub-section (3), such limited liability partnership and its designated partners shall be liable to a penalty of one hundred rupees for each day during which such failure continues, subject to a maximum of one lakh rupees for the limited liability partnership and fifty thousand rupees for every designated partner.
(6) Any limited liability partnership which fails to comply with the provisions of sub-section (1), sub-section (2) and sub-section (4), such limited liability partnership shall be punishable with fine which shall not be less than twenty-five thousand rupees, but 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 may extend to one lakh rupees.
Introduction
Section 34 separates record keeping, preparation of the yearly statement, filing and audit. The Act itself specifies a six-month preparation period for the statement, but leaves the filing period, form, fees, book retention and audit detail to prescription. The 2021 amendment split consequences: subsection (5) addresses filing under subsection (3), while subsection (6) addresses the other listed duties.
Key takeaways
Keep books
Maintain prescribed books each year on cash or accrual basis using double entry accounting at the registered office for the prescribed period.
Prepare, sign and file
Prepare the Statement of Account and Solvency within six months after year-end, obtain designated-partner signatures, then file it within the separately prescribed time.
Audit and exemptions
Audit follows prescribed rules; a notified class exemption can remove that audit requirement.
Different defaults
Late filing carries a daily capped penalty; failures concerning books, preparation or audit fall under the subsection (6) fine provision.
Maintain books through the year
Choose the permitted cash or accrual basis, use double entry accounting, and keep the prescribed books at the registered office for the prescribed period. Verify the detailed requirements in current rules.
Close and prepare the yearly statement
At year-end, prepare the prescribed Statement of Account and Solvency as at the last day of that financial year within six months and obtain designated-partner signatures.
File the statement
Check the current prescribed filing deadline, form, manner and fee separately from the Act's six-month preparation window. Submit to the Registrar and preserve acknowledgement.
Determine audit status
Check the prescribed audit rules and any current Gazette notification exempting the LLP's class. Record the basis for audit or exemption each year.
Practical preparation
For each LLP financial year:
- Maintain prescribed double entry books at the registered office.
- Prepare and sign the statement within six months after year-end.
- Confirm the prescribed filing date and file with fee.
- Document audit requirement or class exemption.
- Retain filing and audit evidence.
Practical checklist
Do
- Calendar preparation and filing as two separate deadlines.
- Keep the audit exemption source and calculation with yearly accounts.
Avoid
- Do not assume six months is the filing deadline; the Act leaves filing time to prescription.
- Do not apply the filing penalty to every books or audit default without identifying the breached subsection.
Illustrative example
Hypothetical: prepared statement filed late
Maple LLP completes and signs its yearly statement within six months but misses the prescribed Registrar filing date.
Separate duties
Preparation under subsection (2) was completed; filing under subsection (3) was missed.
Cure filing
File the statement with the prescribed fee and retain proof.
Assess consequence
Apply subsection (5)'s ₹100 daily amount and separate LLP and designated-partner caps, subject to adjudication.
Outcome
- The filing failure is addressed under subsection (5); the facts do not by themselves establish failure to prepare under subsection (2).
Glossary
- Statement of Account and Solvency
- The annual statement prepared as at financial year-end and filed with the Registrar under Section 34.
- Double entry system
- Accounting that records both sides of each transaction, as expressly required by subsection (1).
- Class exemption
- A Central Government Gazette notification exempting a defined class of LLPs from the subsection (4) audit requirement.
Frequently asked questions
Is the six-month period the Registrar filing deadline?
Section 34(2) sets six months for preparing the statement. Section 34(3) requires filing within the prescribed time, which must be checked separately.
Are all LLPs necessarily audited?
Audit follows prescribed rules, and subsection (4) allows the Central Government to exempt a class of LLPs by Gazette notification.
What happens if the yearly statement is filed late?
Subsection (5) states a ₹100 daily penalty while failure continues, capped at ₹1 lakh for the LLP and ₹50,000 for each designated partner.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026