Section 34 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.
Section 34 is the accounts section of the LLP Act. It requires proper books of account, a Statement of Account and Solvency prepared within six months of the financial year-end, filing of that statement with the Registrar, and audit as the rules prescribe. The 2021 Act replaced the single penalty sub-section with two: a daily penalty for late filing and a fine for the other defaults. If you want the annual accounts and filing handled for your LLP, our annual filing of LLP service covers it.
An LLP must keep proper books of account on cash or accrual basis and by the double entry system at its registered office (s.34(1)). Within six months from the end of each financial year, it must prepare a Statement of Account and Solvency, signed by the designated partners (s.34(2)), and file it with the Registrar within the prescribed time (s.34(3)). Accounts must be audited in accordance with the rules (s.34(4)). For late filing under s.34(3), the LLP and its designated partners are liable to a penalty of one hundred rupees for each day, capped at one lakh rupees (LLP) and fifty thousand rupees (each designated partner) (s.34(5)).
Section 34(1): books of account
The LLP "shall maintain such proper books of account as may be prescribed relating to its affairs for each year of its existence". Three features are set out in the text:
- Basis: cash basis or accrual basis.
- System: according to the double entry system of accounting.
- Place and period: at the registered office, for such period as may be prescribed.
The Act does not itself give the retention period. It leaves it to the rules. For a practical guide to records, see our article on maintenance of books and records by an LLP.
Section 34(2): Statement of Account and Solvency
Every LLP shall, within six months from the end of each financial year, prepare a Statement of Account and Solvency for that year, as at the last day of the financial year, in the prescribed form. The statement shall be signed by the designated partners. The word "designated" matters; it is not enough for any partner to sign. See section 7 on designated partners.
Note the two clocks. The statement must be prepared within six months of year-end under s.34(2). It must be filed within the time prescribed under s.34(3). The Act's text does not state the filing date; the LLP Rules do. The existing post on Form 8 walks through the filing, and our article on Statement of Account and Solvency gives further background.
Section 34(3): filing with the Registrar
The LLP shall file the Statement of Account and Solvency with the Registrar every year, "within the prescribed time", "in such form and manner and accompanied by such fees as may be prescribed". The fees and form are for the rules. This article states no fee. The statement filed with the Registrar is open to inspection under section 36.
Section 34(4): audit
The accounts of LLPs shall be audited in accordance with such rules as may be prescribed. The proviso allows the Central Government, by notification in the Official Gazette, to exempt any class or classes of LLPs from this requirement.
So the Act does not say, by itself, which LLPs need audit. The rules and any exemption notification decide that. For the thresholds in the rules, see audit requirements under the LLP Rules and audit of LLP accounts: when mandatory. Standards for accounting and auditing are the subject of the new section 34A.
Section 34(5) and (6): consequences after 2021
The 2021 Act (clause 13) substituted sub-section (5) with two sub-sections.
Before the 2021 amendment, s.34(5) provided that an LLP failing to comply with the section was punishable with fine of not less than Rs 25,000 and up to Rs 5 lakh, and every designated partner with fine of not less than Rs 10,000 and up to Rs 1 lakh. It made no distinction between a late filing and other failures.
Now the position is split:
| Sub-section | Default | Consequence |
|---|---|---|
| 34(5) | Failure to comply with sub-section (3) (filing the Statement of Account and Solvency) | LLP and its designated partners liable to a penalty of Rs 100 for each day the failure continues, subject to a maximum of Rs 1,00,000 for the LLP and Rs 50,000 for every designated partner |
| 34(6) | Failure to comply with sub-section (1), (2) and (4) (books, preparation, audit) | LLP punishable with fine of not less than Rs 25,000 but up to Rs 5,00,000; every designated partner punishable with fine of not less than Rs 10,000 but up to Rs 1,00,000 |
Two differences are worth noting. Late filing under s.34(3) is a daily penalty with a cap. The other failures remain fines with a minimum and a maximum, which means they are offences and not merely penalties. The text of s.34(6) reads "fails to comply with the provisions of sub-section (1), sub-section (2) and sub-section (4)"; read it as covering a failure under any of those sub-sections.
Adjudication and relief
Section 76A (inserted by the 2021 Act) lets adjudicating officers adjudge penalties. Its first proviso says that where the default relates to non-compliance of sub-section (3) of section 34 and has been rectified either before or within thirty days of the issue of the notice by the adjudicating officer, no penalty shall be imposed, and the proceedings for that default are deemed concluded. Its second proviso halves the penalty for a small limited liability partnership or a start-up limited liability partnership, subject to a maximum of one lakh rupees for the LLP and fifty thousand rupees for every partner or designated partner. See sections 76 and 76A for the full text. The additional fee for late filing is dealt with in section 69.
Example. Sharma & Bose LLP's year ends on 31 March. The designated partners sign the Statement of Account and Solvency in September, within the six months required by s.34(2), but the LLP does not file it by the prescribed date. Each day of delay adds a Rs 100 penalty under s.34(5), up to Rs 1 lakh for the LLP and Rs 50,000 for each designated partner, and an adjudicating officer's notice may follow. If the LLP files within thirty days of such a notice, the first proviso to s.76A(3)(a) says no penalty is imposed for that default.
Practical points
- Fix the accounting basis and keep double-entry books from the first year.
- Check the current LLP Rules for the filing date, the form and the audit trigger. The Act leaves all three to the rules.
- The annual return is a separate filing; see section 35.
Need help with LLP accounts and filing?
Books, the Statement of Account and Solvency and audit all sit on a calendar, and a missed date adds a daily penalty. Our annual filing of LLP service prepares and files the statement and the return for you and tells you what is due.
Key takeaways
- Keep proper books on cash or accrual basis, double entry, at the registered office (s.34(1)).
- Prepare the Statement of Account and Solvency within six months of year-end, signed by the designated partners (s.34(2)).
- File it with the Registrar within the prescribed time (s.34(3)); audit is as the rules prescribe (s.34(4)).
- Late filing: Rs 100 a day, up to Rs 1 lakh for the LLP and Rs 50,000 per designated partner (s.34(5)).
- Other failures: fine of Rs 25,000 to Rs 5 lakh for the LLP and Rs 10,000 to Rs 1 lakh for each designated partner (s.34(6)).
Read next
- Section 34A: accounting and auditing standards
- Section 35: annual return
- How to file LLP Form 8: Statement of Account and Solvency
- Penalty provisions under the LLP Act: complete list
Disclaimer: Based on the Limited Liability Partnership Act, 2008 as amended by the Limited Liability Partnership (Amendment) Act, 2021, as consulted on 1 October 2026. Forms, fees and procedure are set by the LLP Rules, 2009 as amended from time to time. This article is general information, not legal advice; check the official text before acting.