Rules unveiled: LLPs must maintain books of accounts: SECP

The Securities and Exchange Commission of Pakistan (SECP) has made it mandatory for the Limited Liability Partnership (LLP) to maintain comprehensive documentation including books of accounts on accrual basis and double entry system of accounting and financial statements. According to the SRO 601(I)/2018 issued by the SECP here on Thursday, the commission has notified Limited Liability Partnership Regulations, 2018.
Each LLP shall maintain books of accounts at its registered office relating to its state of affairs for each year of its existence on accrual basis and according to double entry system of accounting. The books of accounts of every LLP relating to a period of not less than ten years immediately preceding the current year shall be preserved in good order.
Every LLP shall prepare its financial statements within a period of four months from the end of each financial year. Provided that the LLPs as notified by the Commission shall be required to file the financial statements along with the fee with the Registrar.
The books of account shall contain particulars of all sums of money received and expended by the LLP and the matters in respect of which the receipt and expenditure takes place; a record of the assets and liabilities of the LLP; statements of cost of goods purchased, inventories, work-in- progress, finished goods and cost of goods sold; (d) any other records decided by the partners; and any other particulars as notified by the Commission.
The financial statements of the LLP shall be approved through resolution passed by a majority in number of partners. The financial statements shall be signed on behalf of the limited liability partnership by its designated partner and where the designated partner is not available, these shall be signed by all the partners, the SECP said.
An auditor or auditors of a LLP shall be appointed after seeking approval of partners through resolution passed by a majority of partners. The first auditor or auditors of a LLP shall be appointed by the partners within sixty days of the date of incorporation of the LLP. Provided that the LLP shall obtain a consent in writing from the auditor before his appointment.
The SECP said that any person desirous of forming an LLP shall make an application to the registrar as per LLP-Form-I [Part 1] for reservation of name, either online or in physical form, along with fee as specified in Fee Schedule of the regulations. The applicant shall ensure that the proposed name of the limited liability partnership shall fulfill the criteria specified in section 6 of the Act and these regulations.
The registrar if satisfied that the proposed name fulfills the criteria specified in the Act and these regulations, may allow the same as per LLP-Form-I [Part II] for a period of thirty days from the date of availability of name. Provided that where the applicant fails to file application for incorporation of LLP along with payment of fee within the said period, the availability of name shall stand cancelled: Provided further that in case of refusal of the proposed name, the registrar shall issue order of refusal as per LLP-Form-I [Part III]. Any person aggrieved by order of the registrar may prefer an appeal within thirty days of the date of order to the Commission.
The SECP has said that the applicant shall make an application to the registrar as per LLP-Form-III either online or in physical form for incorporation of LLP along with fee as per fee schedule and documents including copies of national identity card (NIC) of the partners and of designated partners and in case of physical application, of witness to the documents and in case of foreigner, a copy of passport; attested copy of LLP agreement duly executed by the partners, witnessed and notarized; consent of designated partner (if any). In case of physical application, original bank challan evidencing the payment of fee as specified in fee schedule and any other information and document as required by the registrar.