The financial year

•  Every limited liability partnership must prepare annual accounts report on the financial performance and position of the limited liability partnership during the year.
•  The period reported on in the accounts is called the financial year. This starts on the day after the previous financial year ended or, in the case of a new limited liability partnership, on the day of incorporation.
• Another term for a ‘financial year' is an ‘accounting reference period'.The accounting reference period ends on the accounting reference date (ARD) – or a date up to seven days either side of the ARD, if this is more convenient.

Accounting reference date (ARD)

• For a new limited liability partnership, the ARD is set using its date of incorporation.
• You can change the first accounting reference period and subsequent accounting reference periods by changing the ARD.
• For all new limited liability partnerships, the first accounting reference period is automatically set as the first anniversary of the last day in the month in which the limited liability partnership was incorporated.
• ARD could be changed by completing Form LLP225 and sending it to Companies House.
• LLP normally have 10 months to send their Accounts to Companies House.

Contents of the accounts

• Generally, accounts must include:
  - a profit and loss account;
  - a balance sheet signed by a designated member;
  - an auditor's report signed by the auditor (if appropriate);
  - notes to the accounts; and group accounts (if appropriate).
• A limited liability partnership first accounts cover the period starting on the date of incorporation, not the first day of trading. They end on the accounting reference date (ARD).
• The accounts must be approved by the limited liability partnership members and signed before they are sent to Companies House. The balance sheet must be signed by a designated member, with any statements about accounting or filing exemptions appearing above the designated member signature. If an auditors' report or special auditors' report is attached to the accounts, then it must state the names of the auditors and be signed by them.

Delivery of accounts to Companies House

• All limited liability partnerships, whether they trade or not, must prepare and deliver accounts to Companies House.
• The time normally allowed for delivering accounts is 10 months from the ARD.
• However, if the accounting reference period has been shortened, the time allowed for filing the accounts is the longer of:
  - 10 months from the ARD; or
  - 3 months from the date of the notice (Form LLP225).

Penalty for late accounts delivering

• The fixed penalties are as follows:

• Failing to deliver accounts on time is also a criminal offence for which designated members may be prosecuted.

Small or medium-sized LLP

• To be a small limited liability partnership , at least 2 of the following conditions must be met:
  - annual turnover must be ₤5,6 million or less;
  - the balance sheet total must be ₤2,8 million or less;
  - the avarage number of employees must be 50 or fewer.
• To be a medium-sized limited liability partnership , at least 2 of the following conditions must be met:
  - annual turnover must be ₤22,8 million or less;
  - the balance sheet total must be ₤11,4 million or less;
  - the avarage number of employees must be 250 or fewer.

Which small LLP qualify for audit exemption

• To qualify for total audit exemption, a limited liability partnership must:
  - qualify as small;
  - have a turnover of not more than ₤5,6 million; and
  - have a balance sheet total of not more than ₤2,8 million.

Dormant LLP

• A limited liability partnership is dormant if it has had no ‘significant accounting transactions' during the period.
• Dormant limited liability partnerships can claim exemption from audit by only delivering to Companies House an abbreviated balance sheet and notes.

Auditor

• The designated partners appoint the auditor of the limited liability partnership annually.
• An auditor must be independent of the limited liability partnership, therefore, a person cannot be appointed as an auditor if he or she is:
  - a partner or employee of the limited liability partnership or an associated undertaking;
  - a partner or employee of such a person, or a partnership of which such a person is a partner.
• Not all partners of an accountancy body are eligible to act as an auditor but the appropriate body will be able to tell you whether a particular individual or firm is a Registered Auditor.

Annual return

• Every limited liability partnership must deliver an annual return to Companies House within 28 days of its made-up date.
• An annual return must contain the following information:
  - the name of the limited liability partnership;
  - its registered number;
  - its registered office address;
  - the address where certain limited liability partnership registers are kept if not at the registered office;
  - the name and address of each member;
  - if only some members are designated members, which of them are designated members.
• The made-up date is usually the anniversary of:
  - the incorporation of the limited liability partnership; or
  - the made-up date of the previous annual return registered at Companies House.