LLP Accounting

LLP Accounting

Section 34 of the Limited Liability Partnership Act requires that every LLP shall maintain and keep the accounting records which sufficient to show and explain the transaction of an LLP and which discloses with reasonable accuracy the financial position of the LLP. Such a book of account need to prepare on accrual basis of cash basis and according to the double entry accounting system.

Following are the records which should be maintained at the registered office of the LLP:

Entries from day to day of all sums of money received and expended by the LLP, and the matters in respect of which the receipt and expenditure takes place;
Records of the assets and liabilities;
Statement of inventories;
Statement of work-in-progress;
Statement of finished goods;
Statement of cost of goods sold; and
Other details which the partner may decide.

The financial year or an LLP starts from the date of its incorporation in case of a newly incorporated LLP and in other cases is start on 01st April and ends on 31st March every year. At the end of financial the designated partners are required to prepare an annual financial statement and the same need to certify it to be true. The books of account of the LLP is required to be kept and maintained at the registered office of the LLP for the period of 8 years