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 is the accounting rule of the LLP Rules. This article covers sub-rules (1) to (7): what books an LLP must keep, how long they are preserved, when the Statement of Account and Solvency is filed and who signs it. Sub-rules (8) to (19), on audit, are covered in the next article. Everything here is as notified in 2009.
An LLP must keep books of account that show and explain its transactions, disclose its financial position with reasonable accuracy at any time, and let the designated partners check the Statement of Account and Solvency (rule 24(1)). The books are preserved for eight years from the date they are made (rule 24(3)). The Statement of Account and Solvency is filed within thirty days from the end of six months of the financial year to which it relates (rule 24(4)). It is signed by the designated partners, and each is taken to be a party to its approval unless he shows he took all reasonable steps to prevent it (rule 24(6), (7)). The Rules have been amended since 2009.
Read this first: the 2009 text and later amendments
This article states what rule 24(1) to (7) provided as notified on 1 April 2009. The Rules have been amended several times since, and the form, the fee, the time limit and the filing steps for the Statement of Account and Solvency may all differ now. Check the MCA portal or the current Rules before acting. This article gives no fee amount, no form field detail and no portal step, and it refers to the form only as "the form prescribed for this purpose". For the Act, which has also been amended, see Section 34 of the LLP Act.
Rule 24 implements section 34, including sub-section (3), which the rule names. For the practical side of keeping records, see our guide on maintenance of books and records by an LLP. If you need help with LLP accounts and filings, our annual filing of LLP service covers the current requirements.
Rule 24(1): what the books must do
Every LLP "shall keep books of accounts which are sufficient to show and explain the limited liability partnership's transactions" and which are such as to:
- (a) disclose with reasonable accuracy, at any time, the financial position of the LLP at that time; and
- (b) enable the designated partners to ensure that any Statement of Account and Solvency prepared under the rule complies with the requirements of the Act.
The test is functional. The rule does not require a particular accounting package, ledger format or system. It asks whether the books can explain transactions and show the position "at any time". The second limb connects the books to the designated partners' own duty, which is to be able to sign the statement.
Rule 24(2): what the books contain
The books of account "shall contain":
| Clause | Content |
|---|---|
| (a) | Particulars of all sums of money received and expended and the matters in respect of which the receipt and expenditure takes place |
| (b) | A record of the assets and liabilities |
| (c) | Statements of cost of goods purchased, inventories, work-in-progress, finished goods and cost of goods sold |
| (d) | Any other particulars which the partners may decide |
Clause (c) reads like a trading LLP. The rule does not say how a service LLP, with no goods, applies it; the text is silent. Clause (d) lets the partners add to the list.
Rule 24(3): eight years
The books "shall be preserved for eight years from the date on which they are made". The eight years run from the date the books are made, not from the end of the financial year or the date of any filing. The text does not say what is meant by the books being "made" (for example, each entry or each year's book), so the starting date for a continuing book is a matter of reading. Rule 27 deals separately with the preservation and destruction of old records and is covered in the article on rules 25 to 27.
Rule 24(4) and (5): filing the Statement of Account and Solvency
For the purposes of section 34(3), every LLP shall file the Statement of Account and Solvency in the prescribed form with the Registrar "within a period of thirty days from the end of six months of the financial year to which the Statement of Account and Solvency relates". The fee is as in the annexure (rule 24(5)), which this article does not repeat.
The period is built in two steps: first find the end of the first six months of the financial year, then add thirty days.
Example. Joshi Rane LLP has a financial year of 1 April to 31 March. Six months of the year end on 30 September. Thirty days from that point run to 30 October. As notified in 2009, the statement for that financial year was due by then. The same worked example applies to any financial year; only the starting date changes. Check the current due date before relying on this.
The rule is silent on what happens if the statement is filed late; the Act and the current Rules cover that. The Act's section 69 deals with additional fee for late filing.
Rule 24(6) and (7): who signs and who is responsible
Rule 24(6): the Statement "shall be signed on behalf of the limited liability partnership by its designated partners".
Rule 24(7): it "shall be signed by the designated partners of the LLP and each designated partner shall be taken to be a party to its approval unless he shows that he took all reasonable steps to prevent their being approved and signed".
Two points:
- Signature by designated partners. The rule speaks of "designated partners" in the plural, so each designated partner is involved. The rule does not say that a single designated partner can sign alone.
- Reversed burden. A designated partner is taken to be a party to approval unless he shows that he took all reasonable steps to prevent it. A designated partner who disagrees therefore cannot stay silent. He must be able to show that he took steps.
Drafting note. Sub-rules (6) and (7) overlap: both provide that the designated partners sign. Sub-rule (7) adds the presumption of approval. The overlap does not change the meaning.
Example. Naik, Oberoi and Pandey are designated partners of Naik Oberoi LLP. Pandey believes the statement overstates the LLP's ability to pay its debts. If he says nothing and the statement is approved, rule 24(7) takes him to be a party to the approval. To rely on the exception, he has to show that he took all reasonable steps to prevent it being approved and signed, for example by recording his objection in writing to the other designated partners before it is signed.
How the sub-rules fit
| Sub-rule | Who acts | What |
|---|---|---|
| 24(1), (2) | The LLP | Keeps books that show and explain transactions and the financial position |
| 24(3) | The LLP | Preserves the books for eight years |
| 24(4), (5) | The LLP | Files the Statement within thirty days from the end of six months of the financial year, with the fee |
| 24(6), (7) | Designated partners | Sign; each presumed to approve unless he shows reasonable steps to prevent it |
Practical points
- Keep books so that a designated partner can see the financial position on any day, not only at year end.
- Calendar the filing from the end of the first six months of the financial year.
- Designated partners should keep a record of any objection they make before the statement is signed.
- For the how-to on the filing, see our guide on the Statement of Account and Solvency, written for the current process.
Need help with LLP accounts and statement filing?
Accounts that can support a signed statement, and a filing made on time, protect the designated partners personally. Our annual filing of LLP team can keep the books, prepare the statement and handle the filing under the current rules.
Key takeaways
- An LLP must keep books that show and explain its transactions and disclose its financial position with reasonable accuracy at any time (rule 24(1)).
- The books contain money received and spent, assets and liabilities, cost statements and any other particulars the partners decide (rule 24(2)).
- The books are preserved for eight years from the date they are made (rule 24(3)).
- The Statement of Account and Solvency is filed within thirty days from the end of six months of the financial year (rule 24(4)).
- Designated partners sign, and each is taken to approve unless he shows he took all reasonable steps to prevent it (rule 24(6), (7)).
- This is the 2009 position; the form, fee and time limit must be checked.
Read next
- Rule 24: audit of LLP accounts and auditors
- Rules 25-27: annual return, inspection and destruction of records
- Rule 23: form of contribution and valuation
- Financial disclosures and accounts of LLP
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.