The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008

Appointment of auditors U.K.

36.  Sections 485 to 488 apply to LLPs, modified so that they read as follows—

“Appointment of auditors: general

485.— (1) An auditor or auditors of an LLP must be appointed for each financial year of the LLP, unless the designated members reasonably determine otherwise on the ground that audited accounts are unlikely to be required.

(2) For each financial year for which an auditor or auditors is or are to be appointed (other than the LLP's first financial year), the appointment must be made before the end of the period of 28 days beginning with—

(a) the end of the time allowed for sending out copies of the LLP's annual accounts and auditor's report for the previous financial year (see section 423), or

(b) if earlier, the day on which copies of the LLP's annual accounts and auditor's report for the previous financial year are sent out under section 423.

This is the “period for appointing auditors”.

(3) The designated members may appoint an auditor or auditors—

(a) at any time before the LLP's first period for appointing auditors,

(b) following a period during which the LLP (being exempt from audit) did not have any auditor, at any time before the LLP's next period for appointing auditors, or

(c) to fill a casual vacancy in the office of auditor.

(4) The members may appoint an auditor or auditors—

(a) during a period for appointing auditors,

(b) if the LLP should have appointed an auditor or auditors during a period for appointing auditors but failed to do so, or

(c) where the designated members had power to appoint under subsection (3) but have failed to make an appointment.

(5) An auditor or auditors of an LLP may only be appointed—

(a) in accordance with this section, or

(b) in accordance with section 486 (default power of Secretary of State).

This is without prejudice to any deemed re-appointment under section 487.

Appointment of auditor: default power of Secretary of State

486.— (1) If an LLP fails to appoint an auditor or auditors in accordance with section 485, the Secretary of State may appoint one or more persons to fill the vacancy.

(2) Where subsection (2) of that section applies and the LLP fails to make the necessary appointment before the end of the period for appointing auditors, the LLP must within one week of the end of that period give notice to the Secretary of State of his power having become exercisable.

(3) If an LLP fails to give the notice required by this section, an offence is committed by—

(a) the LLP, and

(b) every designated member who is in default.

(4) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.

Term of office of auditors

487.— (1) An auditor or auditors of an LLP hold office in accordance with the terms of their appointment, subject to the requirements that—

(a) they do not take office until any previous auditor or auditors cease to hold office, and

(b) they cease to hold office at the end of the next period for appointing auditors unless re-appointed.

(2) Where no auditor has been appointed by the end of the next period for appointing auditors, any auditor in office immediately before that time is deemed to be re-appointed at that time, unless—

(a) the LLP agreement requires actual re-appointment, or

(b) the deemed re-appointment is prevented by the members under section 488, or

(c) the members have determined that he should not be re-appointed, or

(d) the designated members have determined that no auditor or auditors should be appointed for the financial year in question.

(3) This is without prejudice to the provisions of this Part as to removal and resignation of auditors.

(4) No account shall be taken of any loss of the opportunity of deemed reappointment under this section in ascertaining the amount of any compensation or damages payable to an auditor on his ceasing to hold office for any reason.

Prevention by members of deemed re-appointment of auditor

488.— (1) An auditor of an LLP is not deemed to be re-appointed under section 487(2) if the LLP has received notices under this section from members representing at least the requisite percentage of the total voting rights in the LLP that the auditor should not be re-appointed.

(2) The “requisite percentage” is 5%, or such lower percentage as is specified for this purpose in the LLP agreement.

(3) A notice under this section—

(a) may be in hard copy or electronic form,

(b) must be authenticated by the person or persons giving it, and

(c) must be received by the LLP before the end of the accounting reference period immediately preceding the time when the deemed reappointment would have effect.”