There is total exemption from audit for certain small limited liability partnerships if they are eligible and wish to take advantage of it. Further details about how to claim exemption are in this section.

Which small limited liability partnerships qualify for audit exemption?

To qualify for total audit exemption, a limited liability partnership must:

1. qualify as small;
2. have a turnover of not more than £5.6 million; and
3. have a balance sheet total of not more than £2.8 million.

Are all types of small limited liability partnership eligible for the exemption?

No. Audited (rather than unaudited) accounts must be delivered to Companies House if the limited liability partnership falls into any of the following categories:

(a) A parent limited liability partnership or subsidiary undertaking (unless dormant for the period during which it was a subsidiary) except where the group:

1. qualifies as a small group or would qualify if all the bodies corporate in the group were companies ; and
2. the turnover for the whole group is not more than £5.6 million net (or £6.72 million gross); and
3. the group’s combined balance sheet total is not more than £2.8 million net (or £3.36 million gross).

(b) A member of a group in which any member is:

1. a public company or body corporate which (not being a company) has power under its constitution to offer shares or debentures to the public;
2. a person who has permission under Part 4 of the Financial Services and Markets Act 2000 to carry on a regulated activity;
3. a person who carries on insurance market activity.

(c) A person (other than a banking limited liability partnership) who has permission under Part 4 of the Financial Services and Markets Act 2000 to carry on a regulated activity.

(d) For accounts delivered to the Registrar after 5 September 2005 a person who was during the relevant financial year an appointed representative within the meaning of s39 of the Financial Services and Markets Act 2000 (other than an appointed representative whose scope of appointment is limited to activities that are not regulated activities – see below).

“Regulated activity” does not include:

1. arranging regulated mortgage contracts;
2. assisting administration and performance of a contract of insurance;
3. advising on regulated mortgage contracts; or
4. dealing as agent, arranging deals in investments or advising on investments – where the activity concerns relevant investments that are not contractually based investment.

(e) A special register body or employers association under the Trade Union and Labour Relations (Consolidation) Act 1992.

What does an audit-exempt limited liability partnership need to send to Companies House?

If the limited liability partnership qualifies, unaudited accounts may be delivered to the Registrar in the form of an abbreviated balance sheet and notes containing statements to the following effect above the designated member’s signature:

1. For the year ended . . . (date) the limited liability partnership was entitled to exemption under section 249A(1) of the Companies Act 1985 (as applied to limited liability partnerships by regulation 3 of the Limited Liability Partnerships Regulations 2001).
2. The members acknowledge their responsibility for:
   • ensuring the limited liability partnership keeps accounting records which comply with section 221; and
   • preparing accounts which give a true and fair view of the state of affairs of the limited liability partnership as at the end of the financial year, and of its profit or loss for the financial year, in accordance with the requirements of section 226, and which otherwise comply with the requirements of the Companies Act relating to accounts, so far as applicable to the limited liability partnership.
3. The accounts have been prepared in accordance with the special provisions in Part VII of the Companies Act 1985 (as applied to limited liability partnerships by regulation 3 of the Limited Liability Partnerships Regulations 2001) relating to small limited liability partnerships.

If the limited liability partnership chooses, it may deliver the unabbreviated accounts prepared for its members. The same statements must appear on the unabbreviated balance sheet.

Please Note:
The statements for audit exemption should not include reference to section 249b(2), the members not requiring an audit. This section of the Act does not apply to LLPs and the statement should not be included on the balance sheet.

How long do I have to deliver accounts to Companies House?

The same time applies as for all other accounts. The same penalties are imposed for late filing.

Does an audit-exempt limited liability partnership still have to send accounts to its members?

Yes. In accordance with the Act, members have a right to receive and demand copies of the accounts.

Are annual accounts required if a limited liability partnership is not trading?

All limited liability partnerships, whether they trade or not, must prepare and deliver accounts to Companies House. However, a limited liability partnership may claim exemption from audit as a ‘dormant limited liability partnership’ if it has not traded during a financial year, and provided it meets certain other criteria.

Dormant limited liability partnerships do not need to appoint auditors and can deliver even simpler annual accounts to Companies House. For more information about dormant accounts, see the next section of this information.

Tags: audit exemptions