Rule 24 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rule 24(8) to (19) is the audit part of the LLP Rules. It says that LLP accounts are audited, lists the turnover and contribution limits below which audit was not required as notified, requires the auditor to be a Chartered Accountant in practice, and sets out how auditors are appointed, re-appointed, paid, removed and how they resign. This article explains it as notified in 2009.
LLP accounts are to be audited in accordance with the rules, but as notified in 2009 an LLP whose turnover did not exceed forty lakh rupees in any financial year, or whose contribution did not exceed twenty-five lakh rupees, was not required to get accounts audited (rule 24(8)). Only a Chartered Accountant in practice may be auditor (rule 24(9)). The designated partners appoint, the partners step in if they do not, and an auditor in office is deemed re-appointed unless the agreement or a majority of partners provides otherwise (rule 24(11), (12), (14)). Removal follows the agreement, or needs all partners' consent (rule 24(18)). Resignation is by written notice at the registered office (rule 24(19)). The limits have been changed by later amendments; check the current text.
Read this first: the 2009 text and later amendments
This article states what rule 24(8) to (19) provided as notified on 1 April 2009. The thresholds given here are the figures in the 2009 text. The Rules have been amended several times since, and the audit exemption limits, the forms and the time limits may have been changed. Do not use the 2009 figures to decide whether your LLP needs an audit today. Check the current Rules on the MCA portal. The Act has also changed, including through the LLP (Amendment) Act, 2021 and the idea of a small LLP; for the Act-level position see Section 34 of the LLP Act and Section 34A on accounting and auditing standards. This article gives no fee amount and no portal step.
The earlier part of this rule, on books of account and the Statement of Account and Solvency, is in the first article on rule 24. For help with audit and annual compliance today, see our annual filing of LLP service.
Rule 24(8): audit, and the exemption provisos as notified
The main part says "the accounts of every limited liability partnership shall be audited in accordance with these rules". Three provisos follow.
| Proviso | As notified in 2009 |
|---|---|
| First | An LLP whose turnover does not exceed, in any financial year, forty lakh rupees, or whose contribution does not exceed twenty-five lakh rupees, is not required to get its accounts audited |
| Second | If the partners of such an LLP decide to get the accounts audited, they are audited in accordance with these rules |
| Third | Where the partners do not decide on audit, the LLP includes in the Statement of Account and Solvency a statement that the partners acknowledge their responsibilities for complying with the Act and the Rules on books of account, and a certificate in the form specified |
Two points on reading the first proviso:
- "Or", not "and". As printed, the proviso exempts an LLP whose turnover does not exceed the turnover figure or whose contribution does not exceed the contribution figure. Read literally, meeting either test was enough. This is a flag on the 2009 wording, not a statement of the position today.
- "In any financial year". The phrase attaches to turnover. The text does not say how the contribution is measured or at which date.
Example (as notified in 2009). Gupta Hegde LLP has turnover below forty lakh rupees in the year and contribution above twenty-five lakh rupees. Under the first proviso as printed, it met the turnover test and so was not required to get its accounts audited. If the partners nonetheless choose to have an audit, the second proviso applies the audit rules. If they do not, the third proviso requires the acknowledgement statement and certificate in the Statement of Account and Solvency. Whether this is still the position must be checked in the current Rules.
For commentary written for the current position on the limits, see our guides on audit requirements for an LLP and when audit is mandatory.
Rule 24(9) and (10): who can be auditor, and for what period
- Rule 24(9): a person is not qualified for appointment as auditor of an LLP "unless he is a Chartered Accountant in practice".
- Rule 24(10): an auditor or auditors "shall be appointed for each financial year of the LLP for auditing its accounts". So the appointment is year by year.
Rule 24(11) and (12): who appoints and when
The designated partners may appoint an auditor or auditors:
| Clause | When |
|---|---|
| (a) | At any time for the first financial year, but before the end of that year |
| (b) | At least 30 days before the end of each financial year (other than the first) |
| (c) | To fill a casual vacancy in the office of auditor, including when turnover or contribution exceeds the limits in sub-rule (8) |
| (d) | To fill the vacancy caused by removal of an auditor |
Rule 24(12): the partners may appoint where the designated partners have the power under sub-rule (11) and have failed to appoint. So the designated partners come first; the partners are the fallback.
Clause (c) shows how the exemption works. An LLP that was below the limits and had no auditor can appoint one when it crosses them, under the casual vacancy head.
Rule 24(13) to (16): holding office and deemed re-appointment
- Rule 24(13): an auditor holds office as per the terms of appointment and continues until new auditors are appointed or they are re-appointed.
- Rule 24(14): where no auditor has been appointed under sub-rule (11), any auditor in office "shall be deemed to be re-appointed", unless (a) the LLP agreement requires actual re-appointment, or (b) the majority of partners have decided that he should not be re-appointed and have given notice to the LLP.
- Rule 24(15): sub-rule (14) applies without prejudice to the rules on removal and resignation.
- Rule 24(16): a notice under sub-rule (14)(b) may be in hard copy or electronic form, and must be authenticated by the person or persons giving it.
Example. Iyer Menon LLP's auditor, CA Shweta Kulkarni, audited last year's accounts. The designated partners do not appoint anyone for the new year. Under rule 24(14), she is deemed re-appointed. The result changes if the agreement requires actual re-appointment, or if a majority of partners have given the LLP a notice that she should not be re-appointed.
Rule 24(17): remuneration
The auditor's remuneration "may be fixed by the designated partners or by following the procedure as laid down in the limited liability partnership agreement". The rule states no amount.
Rule 24(18): removal
- (a) The partners may remove an auditor "at any time" by following the procedure in the LLP agreement.
- (b) Where the agreement does not provide for removal, the consent of all the partners is needed.
The vacancy created can be filled under sub-rule (11)(d).
Rule 24(19): resignation and unwillingness to be re-appointed
| Clause | What it says |
|---|---|
| (a) | An auditor may resign by depositing a written notice at the LLP's registered office |
| (b) | An auditor unwilling to be re-appointed gives written notice at the registered office not less than 14 days before the end of the time allowed for appointing the new auditor |
| (c) | A notice under (a) or (b) is not effective unless accompanied by a statement of the circumstances connected with his ceasing to hold office |
| (d) | The term ends on the date the notice is deposited or such later date as the notice specifies |
The statement of circumstances in clause (c) is a condition of effectiveness. An auditor who deposits a bare resignation has not, under the text, validly resigned.
Sub-rule summary
| Sub-rule | Subject |
|---|---|
| (8) | Audit rule and the three provisos |
| (9), (10) | Qualification; appointment for each financial year |
| (11), (12) | Appointment by designated partners; fallback by partners |
| (13) to (16) | Holding office; deemed re-appointment; notice |
| (17) | Remuneration |
| (18) | Removal |
| (19) | Resignation and unwillingness to be re-appointed |
Practical points
- Do not rely on the 2009 limits. Check the current Rules before deciding that your LLP is exempt.
- Appoint the auditor at least 30 days before year end (outside the first year), as the 2009 text provided.
- Record any decision against re-appointment in a notice authenticated by the partners giving it.
- If the auditor resigns, ensure that the statement of circumstances accompanies the notice.
- For what an auditor must report, see our guide on the LLP audit report format (linked below).
Need help with LLP audit and compliance?
Whether your LLP needs an audit, and who should be appointed and when, depends on the current rules. Our annual filing of LLP team can review your position and handle the appointment and the filing.
Key takeaways
- LLP accounts are to be audited in accordance with the rules, with exemption provisos (rule 24(8)).
- As notified in 2009, the exemption applied below forty lakh rupees turnover or twenty-five lakh rupees contribution; these limits have been the subject of later amendments.
- Only a practising Chartered Accountant can be auditor (rule 24(9)).
- Appointment is yearly; the designated partners appoint, and the partners step in if they fail (rule 24(10) to (12)).
- An auditor in office is deemed re-appointed unless the agreement or a majority notice says otherwise (rule 24(14)).
- Removal follows the agreement, or needs all partners' consent (rule 24(18)).
- Resignation needs a written notice with a statement of circumstances (rule 24(19)).
Read next
- Rule 24: books of account and the Statement of Account and Solvency
- Rules 25-27: annual return, inspection and destruction of records
- LLP audit report format: what the auditor must report
Disclaimer: Based on the Limited Liability Partnership Rules, 2009 as notified on 1 April 2009. The Rules have been amended several times since; current forms, fees and time limits must be checked before acting. This article is general information, not legal advice; check the official text before acting.