Appointing an Auditor in an LLP: When It Is Mandatory and How the Appointment Actually Works

Your LLP crossed ₹40 lakh in turnover sometime in November. Nobody noticed until the accountant pointed it out in February — and by then the question was not whether you needed an audit. You did. The question was whether you could still appoint an auditor in time, and the answer depended on a date most partners have never heard of: 1 March.

An LLP's auditor must be a chartered accountant in practice, appointed by the designated partners for each financial year. In the first year, appoint at any time before the year ends; after that, at least 30 days before it ends — 1 March for a March year-end. There is no ROC form for the appointment, unlike a company's ADT-1.

Appointing an auditor is like hiring the referee before the match. A referee hired after the game cannot vouch for a score that is already written down, and an auditor appointed after the year has closed cannot really audit a year they never watched. That is why the law gives you a deadline that falls before the year ends, not after it. This guide walks through the appointment the way you will actually face it: whether you need one, who can do it, who appoints, by when, what paper the appointment needs, and how to change auditors when the relationship ends.

Does your LLP even need an auditor?

Not every LLP does. The test sits in section 34 of the LLP Act, 2008 and Rule 24 of the LLP Rules, 2009, and it has two limbs. Your LLP needs an audit for a financial year if its turnover exceeds ₹40 lakh in that year, or if the partners' contribution exceeds ₹25 lakh. Either limb alone triggers it. Below both lines, no audit is required — though you can still choose to have one, and if you do, the audit has to follow the same rules.

Two points trip people up. First, "exceeds" means strictly above. An LLP sitting at exactly ₹40 lakh of turnover and ₹25 lakh of contribution has crossed neither limb. Second, this is not the tax audit. Section 44AB of the Income-tax Act is a separate test with far higher limits, and an LLP can face either test, both, or neither. I have explained the ₹40 lakh / ₹25 lakh test in full — including the edge cases — in the threshold guide, so I will not repeat the whole test here. If you are not sure which side of the line you fall on, read that first. Everything below assumes the audit applies, or that you have chosen a voluntary one.

Who can be your auditor?

Rule 24(9) names exactly one qualification: only a person who is a chartered accountant in practice can be appointed as an LLP's auditor. A firm of chartered accountants can take the appointment in the firm's name, but the work has to be done by a partner holding a certificate of practice. Your accountant who keeps the books cannot sign the audit unless they are a CA in practice — bookkeeping and auditing are different jobs, and the law keeps them apart.

One more thing the rule does not spell out but every practitioner applies: the auditor has to be independent of the LLP. A partner cannot audit the LLP's own books, and neither can someone on the LLP's payroll. An auditor who is not independent is not an auditor at all, whatever their qualification says. When you shortlist, ask for the certificate of practice and check that the CA has no interest in the LLP beyond the audit fee. It takes five minutes and it is the cheapest protection in this whole process.

Who appoints, and by when?

The designated partners appoint the auditor. That is Rule 24(11), and it gives them four windows:

For the LLP's first financial year, they can appoint at any time before the year ends. For every year after that, they must appoint at least 30 days before the financial year ends. For a March year-end, that means 1 March. For the financial year 2026-27, the date is 1 March 2027 — put it in the calendar now, because March is also the month everything else lands. The rule also lets them appoint to fill a casual vacancy, and to fill a vacancy left by an auditor who was removed. I will come back to both.

If the designated partners fail to appoint, the appointment does not die. Rule 24(12) lets the other partners step in and appoint. The law would rather have an auditor appointed late by the partners than no auditor at all. But do not lean on that. A late appointment is still a late appointment — the auditor has less of the year left to watch, and the audit gets harder and more expensive the later it starts.

One habit worth building: appoint the auditor for the next year at the same time you finish the current year's books. The appointment is made for each financial year, so last year's auditor does not automatically carry over — though, as I explain below, the law has a default that can catch you out if you simply forget.

What the appointment actually looks like

There is no portal form for this. That surprises everyone who has ever dealt with a company, because a company files ADT-1 within 15 days of the meeting that appoints its auditor. An LLP files nothing. Rule 24 gives the appointment no ROC form at all — the appointment lives in the LLP's own records and in the letter of appointment. If someone tells you to file ADT-1 for your LLP, they are thinking of a company.

What you actually do is simpler, and it still needs doing properly. First, check what your LLP agreement says about appointing an auditor. Some agreements set out the procedure — a partners' meeting, a written consent, a majority. Follow it. If the agreement says nothing, the designated partners decide, and the decision should still be recorded in writing. Our LLP agreement clauses guide covers what the agreement should say before these moments arrive.

Second, issue a letter of appointment. Rule 24(17) says the auditor's remuneration may be fixed by the designated partners or by following the procedure in the LLP agreement, and the letter should state the term of the appointment, the financial year it covers, and the agreed remuneration. Fix the fee before the work starts, not after the report is written — fee arguments after the fact are the most common reason auditor relationships sour. The fee itself is whatever you agree; the law sets no scale, and no honest guide can quote you one. Get the scope in the same letter: what the audit covers, what records the auditor will need, and when the report is due.

Third, keep the paper. The letter, the partners' decision, the auditor's written consent to act — file them with the year's records. The Registrar never asks for them, but the next auditor will, and so will any partner who later questions how the appointment happened. Books of account have to be preserved for eight years under Rule 24(3); keep the appointment paper with them.

Crossed the limit mid-year?

This is the scenario the guides skip, and it is the one that catches growing LLPs. Suppose your turnover was ₹32 lakh in October and a big contract lands in December, pushing the year past ₹40 lakh. Or the partners put in fresh contribution in January and the total crosses ₹25 lakh. You did not need an auditor when the year started. You do now.

Rule 24(11)(c) covers exactly this: the designated partners may appoint an auditor to fill a casual vacancy, including where the turnover or contribution crosses the limits during the year. Appoint as soon as you know you have crossed — do not wait for March, and certainly do not wait until the books are closed. The auditor needs time inside the year, not just after it. If you only discover the crossing when the accounts are drawn up, appoint immediately and tell the auditor the full story. A late start is fixable; no auditor at all is not.

The same logic applies the other way. If you cross the line in one year and fall back below it the next, the audit obligation is tested year by year. A quiet year needs no auditor, unless the partners choose a voluntary audit anyway.

How long does the auditor stay?

An LLP auditor is appointed for one financial year at a time. The term is whatever the appointment says, and the auditor continues in office until a new auditor is appointed or they are re-appointed. Here is the trap: if nobody appoints a new auditor by the end of the appointment window, the auditor in office is deemed to be re-appointed. That is the default in Rule 24, and it applies unless your LLP agreement requires an actual re-appointment, or a majority of the partners have given the LLP an authenticated written notice saying the auditor should not be re-appointed.

Most LLPs never notice this, because most are happy to keep the same auditor. But if you meant to change auditors and simply forgot to appoint anyone new, you have not created a vacancy — you have re-appointed the old one by silence. If you do want a change, appoint the new auditor inside the window. Do not rely on doing nothing.

Removing or losing an auditor

Relationships end. The partners may remove an auditor from office at any time, following whatever procedure the LLP agreement lays down. Where the agreement is silent on removal, every partner must agree — unanimous consent, not a majority. That is a high bar, and it is deliberate: removing an auditor should not be something a faction can do quietly. If your agreement says nothing about removal, think about adding a procedure the next time it is amended. A clause you write in calm weather is worth more than a unanimous-consent fight in a storm.

An auditor can also leave. Resignation is by written notice delivered at the LLP's registered office, together with a statement of the circumstances connected with ceasing to hold office. And an auditor who does not want to be re-appointed must say so in writing at the registered office, not less than 14 days before the end of the time allowed for appointing the new auditor. That 14-day notice exists so the LLP is not left discovering the gap after the window has closed. Either way, the vacancy is filled the same way it was created: the designated partners appoint under Rule 24(11)(d), and if they fail, the partners step in.

When an auditor leaves mid-year, ask for the handover in writing — what work was done, what was outstanding, what the incoming auditor should know. A clean handover is worth more than a polite goodbye.

What the auditor actually does for Form 8

The audit ends in a report, and the report ends up in Form 8 — the Statement of Account and Solvency every LLP files within 30 days of six months after the year ends, which is 30 October for a March year-end. Where the audit limits are crossed, Form 8 has to be certified by the auditor. Below the line, the designated partners sign a statement acknowledging their responsibilities instead. Either way, the audit is not a formality stapled to the filing; it is the reason the figures in Form 8 can be relied on.

The auditor will also look at things the partners forget. Partner remuneration is one of them — the auditor checks the payments against the LLP agreement, because a payment the agreement never authorised is not deductible. If your LLP pays working partners, make sure the agreement and the payments match before the auditor arrives; our partner remuneration guide explains the clause that has to be there. The annual filing of LLP service page sets out the Form 8 and Form 11 calendar in one place, and if a filing is already late, the compliance fee calculator will work out what the delay costs before you file.

What happens if you skip it

Skipping a required audit is not a paperwork slip. Section 34(6) of the LLP Act, as amended in 2021, puts a fine of ₹25,000 to ₹5,00,000 on the LLP and ₹10,000 to ₹1,00,000 on every designated partner for failing to comply with the audit and filing provisions. Older guides still quote ₹5 lakh as the designated partner's cap — that was the pre-amendment figure, and it is wrong now.

The fine is only half the cost. A Form 8 filed on accounts that were never audited is a defective filing, and the audit still has to be done — late, for that year, by an auditor appointed after the fact who has to reconstruct a year they never saw. Late audits cost more than punctual ones in every currency I know: money, time, and the Registrar's attention. If you have already missed the 1 March date for this year, appoint now and tell the auditor the position honestly. The appointment is still valid; the year is still auditable. What you cannot do is file as though the audit happened.

Five mistakes that cost LLPs real money

Appointing after 1 March. The 30-day rule is not a suggestion. Appoint in February and the auditor has a month of the year left to work with; appoint in April and they are auditing history.

Assuming ADT-1 applies. It does not. LLPs file no form for the appointment — but that also means no one reminds you. The deadline lives in your calendar or nowhere.

Appointing someone who cannot audit. A bookkeeper, a well-meaning relative with an accounting degree, a partner of the LLP — none of them is a chartered accountant in practice, and none of them can sign the audit.

No letter, no fee, no scope. A handshake appointment ends in a fee argument and a report nobody agreed on. The letter costs an hour. The argument costs a month.

Forgetting the mid-year crossing. A big contract or a fresh contribution can move an LLP into audit territory in December. Check the running turnover and contribution every quarter, not every March.

Questions partners actually ask

Who appoints the auditor of an LLP?
The designated partners, for each financial year. If they fail to appoint, the other partners may do so under Rule 24(12).

By when must an LLP appoint its auditor?
At least 30 days before the financial year ends — 1 March for a March year-end, so 1 March 2027 for FY 2026-27. In the LLP's first year, the appointment can be made at any time before the year ends.

Who can audit an LLP?
Only a chartered accountant in practice, under Rule 24(9) of the LLP Rules, 2009. A firm of chartered accountants can take the appointment in the firm's name.

Is there an ADT-1 form for LLP auditor appointment?
No. Rule 24 gives the appointment no ROC form. A company's ADT-1 has no LLP equivalent; the appointment lives in the LLP's records and the letter of appointment.

What if our LLP crosses the audit limit mid-year?
The designated partners appoint an auditor to fill the casual vacancy under Rule 24(11)(c), as soon as the crossing is known. Do not wait for the next March.

Can we remove our auditor?
Yes — the partners may remove an auditor at any time, following the procedure in the LLP agreement. If the agreement says nothing about removal, every partner must agree.

The appointment is a small job done early, or a large job done late. Check where your LLP stands on the ₹40 lakh / ₹25 lakh test today, and if the audit applies, get the letter of appointment out before 1 March. If you would rather have someone run the appointment and the Form 8 filing for you, the LLP registration and compliance team can take it from here.