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

• Citation: S.I. 2008/1911
• Sections: 67

Section 1 Citation and commencement

These Regulations may be cited as the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008 and come into force on 1st October 2008.

Section 2 Application

(1) Subject to paragraphs (2) to (11), these Regulations apply to accounts for financial years beginning on or after 1st October 2008.

(2) Any question whether—

(a) for the purposes of section 382, 383, 384(3) or 467(3) of the Companies Act 2006, as applied to limited liability partnerships by regulations 5 and 26, a limited liability partnership or group qualified as small in a financial year beginning before 1st October 2008, or

(b) for the purposes of section 465 or 466 of that Act, as applied to limited liability partnerships by regulation 26, a limited liability partnership or group qualified as medium-sized in any such financial year,

is to be determined by reference to the corresponding provisions of the Companies Act 1985 or the Companies (Northern Ireland) Order 1986 as applied to limited liability partnerships by the Limited Liability Partnerships Regulations 2001 or the Limited Liability Partnerships Regulations (Northern Ireland) 2004 .

(3) Sections 485 to 488 of the Companies Act 2006, as applied to limited liability partnerships by regulation 36, apply in relation to appointments of auditors for financial years beginning on or after 1st October 2008.

(4) Sections 492, 494 and 499 to 501 of the Companies Act 2006, as applied to limited liability partnerships by regulations 37, 38 and 40, apply to auditors appointed for financial years beginning on or after 1st October 2008.

(5) Section 502 of the Companies Act 2006, as applied to limited liability partnerships by regulation 40, applies to auditors appointed on or after 1st October 2008.

(6) Sections 495, 498 and 503 to 509 of the Companies Act 2006, as applied to limited liability partnerships by regulations 39 to 42, apply to auditors' reports on accounts for financial years beginning on or after 1st October 2008.

(7) Sections 510 to 513 of the Companies Act 2006, as applied to limited liability partnerships by regulations 43 and 44, apply where notice of the proposed removal is given to the auditor on or after 1st October 2008.

(8) Section 515 of the Companies Act 2006, as applied to limited liability partnerships by regulation 45, applies to appointments of auditors for financial years beginning on or after 1st October 2008.

(9) Sections 516 to 518 of the Companies Act 2006, as applied to limited liability partnerships by regulation 45, apply to resignations occurring on or after 1st October 2008.

(10) Sections 519 to 525 of the Companies Act 2006, as applied to limited liability partnerships by regulation 46, apply where the auditor ceases to hold office on or after 1st October 2008.

(11) Section 526 of the Companies Act 2006, as applied to limited liability partnerships by regulation 46, applies where the vacancy occurs on or after 1st October 2008.

Section 3 Interpretation

(1) In these Regulations—

“ 1985 Act ” means the Companies Act 1985,

“ 1986 Order ” means the Companies (Northern Ireland) Order 1986, and

“ LLP ” means a limited liability partnership registered under the Limited Liability Partnerships Act 2000 .

(2) In these Regulations, unless the context otherwise requires—

(a) any reference to a numbered Part, section or Schedule is to the Part, section or Schedule so numbered in the Companies Act 2006,

(b) references in provisions applied to LLPs to other provisions of the Companies Act 2006 are to those provisions as applied to LLPs by these Regulations, and

(c) references in provisions applied to LLPs to provisions of the Insolvency Act 1986 or the Insolvency (Northern Ireland) Order 1989 are to those provisions as applied to LLPs by the Limited Liability Partnerships Regulations 2001 or the Limited Liability Partnerships Regulations (Northern Ireland) 2004 .

Section 4 Scheme of Part 15 as applied to LLPs

Section 380 applies to LLPs, modified so that it reads as follows—

Scheme of this Part

(380)

(1) The requirements of this Part as to accounts , auditor’s reports and energy and carbon reports apply in relation to each financial year of an LLP.

(2) In certain respects different provisions apply to different kinds of LLP.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 5 LLPs subject to the small LLPs regime

Sections 381 to 384 apply to LLPs, modified so that they read as follows—

LLPs subject to the small LLPs regime

(381) The small LLPs regime applies to an LLP for a financial year in relation to which the LLP—

(a) qualifies as small (see sections 382 and 383), and

(b) is not excluded from the regime (see section 384).

LLPs qualifying as small: general

(382)

(1) An LLP qualifies as small in relation to its first financial year if the qualifying conditions are met in that year.

(1A) Subject to subsection (2), an LLP qualifies as small in relation to a subsequent financial year if the qualifying conditions are met in that year.

(2) In relation to a subsequent financial year, where on its balance sheet date an LLP meets or ceases to meet the qualifying conditions, that affects its qualification as a small LLP only if it occurs in two consecutive financial years.

(3) The qualifying conditions are met by an LLP in a year in which it satisfies two or more of the following requirements—

(4) For a period that is an LLP's financial year but not in fact a year the maximum figures for turnover must be proportionately adjusted.

(5) The balance sheet total means the aggregate of the amounts shown as assets in the LLP's balance sheet.

(6) The number of employees means the average number of persons employed by the LLP in the year, determined as follows—

(a) find for each month in the financial year the number of persons employed under contracts of service by the LLP in that month (whether throughout the month or not),

(b) add together the monthly totals, and

(c) divide by the number of months in the financial year.

(7) This section is subject to section 383 (LLPs qualifying as small: parent LLPs).

LLPs qualifying as small: parent LLPs

(383)

(1) A parent LLP qualifies as a small LLP in relation to a financial year only if the group headed by it qualifies as a small group.

(2) A group qualifies as small in relation to the parent LLP's first financial year if the qualifying conditions are met in that year.

(2A) Subject to subsection (3), a group qualifies as small in relation to a subsequent financial year of the parent LLP if the qualifying conditions are met in that year.

(3) In relation to a subsequent financial year of the parent LLP, where on the parent LLP’s balance sheet date the group meets or ceases to meet the qualifying conditions, that affects the group’s qualification as a small group only if it occurs in two consecutive financial years.

(4) The qualifying conditions are met by a group in a year in which it satisfies two or more of the following requirements—

(5) The aggregate figures are ascertained by aggregating the relevant figures determined in accordance with section 382 for each member of the group.

(6) In relation to the aggregate figures for turnover and balance sheet total—

“ net ” means after any set-offs and other adjustments made to eliminate group transactions—

in the case of non-IAS accounts in accordance with Part 1 of Schedule 4 to the Small Limited Liability Partnerships (Accounts) Regulations 2008 (S.I. 2008/1912) or Schedule 3 to the Large and Medium-sized Limited Liability Partnerships (Accounts) Regulations 2008 (S.I. 2008/1913),

in the case of IAS accounts, in accordance with UK-adopted international accounting standards ; and

“ gross ” means without those set-offs and other adjustments.

An LLP may satisfy any relevant requirement on the basis of either the net or the gross figure.

(7) The figures for each subsidiary undertaking shall be those included in its individual accounts for the relevant financial year, that is—

(a) if its financial year ends with that of the parent LLP, that financial year, and

(b) if not, its financial year ending last before the end of the financial year of the parent LLP.

If those figures cannot be obtained without disproportionate expense or undue delay, the latest available figures shall be taken.

LLPs excluded from the small LLPs regime

(384)

(1) The small LLPs regime does not apply to an LLP that ... was at any time within the financial year to which the accounts relate—

(a) a traded LLP,

(b) an LLP that—

(i) is an authorised insurance company, a banking LLP, an e-money issuer, a MiFID investment firm or a UCITS management company, or

(ii) carries on insurance market activity, or

(iii) is a scheme funder of a Master Trust scheme within the meanings given by section 39(1) of the Pension Schemes Act 2017 or section 39(1) of the Pension Schemes Act (Northern Ireland) 2021 (interpretation of Part 1), or

(c) a member of an ineligible group.

(2) A group is ineligible if any of its members is—

(a) a traded company,

(b) a body corporate (other than a company) whose shares are admitted to trading on a UK regulated market ,

(c) a person (other than a small company or small LLP) who has permission under Part 4A of the Financial Services and Markets Act 2000 (c.8) to carry on a regulated activity,

(ca) an e-money issuer,

(d) a small company or small LLP that is an authorised insurance company, a banking company or banking LLP, ... a MiFID investment firm or a UCITS management company, or

(e) a person who carries on insurance market activity, or

(f) a scheme funder of a Master Trust scheme within the meanings given by section 39(1) of the Pension Schemes Act 2017 or section 39(1) of the Pension Schemes Act (Northern Ireland) 2021 (interpretation of Part 1).

(3) A company or LLP is a small company or small LLP for the purposes of subsection (2) if it qualified as small in relation to its last financial year ending on or before the end of the financial year to which the accounts relate.

Section 5A LLPs qualifying as micro-entities

Sections 384A and 384B apply to LLPs, modified so that they read as follows—

384A LLPs qualifying as micro-entities

(384A)

(1) An LLP qualifies as a micro-entity in relation to its first financial year if the qualifying conditions are met in that year.

(2) Subject to subsection (3), an LLP qualifies as a micro-entity in relation to a subsequent financial year if the qualifying conditions are met in that year.

(3) In relation to a subsequent financial year, where on its balance sheet date an LLP meets or ceases to meet the qualifying conditions, that affects its qualification as a micro-entity only if it occurs in two consecutive financial years.

(4) The qualifying conditions are met by an LLP in a year in which it satisfies two or more of the following requirements—

(5) For a period that is an LLP’s financial year but not in fact a year the maximum figure for turnover must be proportionately adjusted.

(6) The balance sheet total means the aggregate of the amounts shown as assets in the LLP’s balance sheet.

(7) The number of employees means the average number of persons employed by the LLP in the year, determined as follows—

(a) find for each month in the financial year the number of persons employed under contracts of service by the LLP in that month (whether throughout the month or not),

(b) add together the monthly totals, and

(c) divide by the number of months in the financial year.

(8) In the case of an LLP which is a parent LLP, the LLP qualifies as a micro-entity in relation to a financial year only if—

(a) the LLP qualifies as a micro-entity in relation to that year, as determined by subsections (1) to (7), and

(b) the group headed by the LLP qualifies as a small group, as determined by section 383(2) to (7).

LLPs excluded from being treated as micro-entities

(384B)

(1) The micro-entity provisions do not apply in relation to an LLP’s accounts for a particular financial year if the LLP ... at any time within that year—

(a) was an LLP excluded from the small LLPs regime by virtue of section 384,

(b) would have been an investment undertaking as defined in Article 2(14) of Directive 2013/34/EU of 26 June 2013 on the annual financial statements etc. of certain types of undertakings were the United Kingdom a member State ,

(c) would have been a financial holding undertaking as defined in Article 2(15) of that Directive were the United Kingdom a member State ,

(d) a credit institution within the meaning given by Article 4(1)(1) of Regulation (EU) No. 575/2013 of the European Parliament and of the Council, which is a CRR firm within the meaning of Article 4(1)(2A) of that Regulation,

(e) would have been an insurance undertaking as defined in Article 2(1) of Council Directive 91/674/EEC of 19 December 1991 on the annual accounts and consolidated accounts of insurance undertakings were the United Kingdom a member State .

(2) The micro-entity provisions also do not apply in relation to an LLP’s accounts for a financial year if—

(a) the LLP is a parent LLP which prepares group accounts for that year as permitted by section 399(4) , or

(b) the LLP is not a parent LLP but its accounts are included in consolidated group accounts for that year.

Section 6 LLP's accounting records

Sections 386 to 389 apply to LLPs, modified so that they read as follows—

Duty to keep accounting records

(386)

(1) Every LLP must keep adequate accounting records.

(2) Adequate accounting records means records that are sufficient—

(a) to show and explain the LLP's transactions,

(b) to disclose with reasonable accuracy, at any time, the financial position of the LLP at that time, and

(c) to enable the members of the LLP to ensure that any accounts required to be prepared comply with the requirements of this Act.

(3) Accounting records must, in particular, contain—

(a) entries from day to day of all sums of money received and expended by the LLP and the matters in respect of which the receipt and expenditure takes place, and

(b) a record of the assets and liabilities of the LLP.

(4) If the LLP's business involves dealing in goods, the accounting records must contain—

(a) statements of stock held by the LLP at the end of each financial year of the LLP,

(b) all statements of stocktakings from which any statement of stock as is mentioned in paragraph (a) has been or is to be prepared, and

(c) except in the case of goods sold by way of ordinary retail trade, statements of all goods sold and purchased, showing the goods and the buyers and sellers in sufficient detail to enable all these to be identified.

(5) A parent LLP that has a subsidiary undertaking in relation to which the above requirements do not apply must take reasonable steps to secure that the undertaking keeps such accounting records as to enable the members of the parent LLP to ensure that any accounts required to be prepared under this Part comply with the requirements of this Act.

Duty to keep accounting records: offence

(387)

(1) If an LLP fails to comply with any provision of section 386 (duty to keep accounting records), an offence is committed by every member of the LLP who is in default.

(2) It is a defence for a person charged with such an offence to show that he acted honestly and that in the circumstances in which the LLP's business was carried on the default was excusable.

(3) A person guilty of an offence under this section is liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);

(b) on summary conviction—

(i) in England and Wales, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both);

(ii) in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum (or both).

Where and for how long records to be kept

(388)

(1) An LLP's accounting records—

(a) must be kept at its registered office or such other place as the members think fit, and

(b) must at all times be open to inspection by the members of the LLP.

(2) If accounting records are kept at a place outside the United Kingdom, accounts and returns with respect to the business dealt with in the accounting records so kept must be sent to, and kept at, a place in the United Kingdom, and must at all times be open to such inspection.

(3) The accounts and returns to be sent to the United Kingdom must be such as to—

(a) disclose with reasonable accuracy the financial position of the business in question at intervals of not more than six months, and

(b) enable the members of the LLP to ensure that the accounts required to be prepared under this Part comply with the requirements of this Act.

(4) Accounting records that an LLP is required by section 386 to keep must be preserved by it for three years from the date on which they are made.

(5) Subsection (4) is subject to any provision contained in rules made under section 411 of the Insolvency Act 1986 (c.45) (company insolvency rules) or Article 359 of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)).

Where and for how long records to be kept: offences

(389)

(1) If an LLP fails to comply with any provision of subsections (1) to (3) of section 388 (requirements as to keeping of accounting records), an offence is committed by every member of the LLP who is in default.

(2) It is a defence for a person charged with such an offence to show that he acted honestly and that in the circumstances in which the LLP's business was carried on the default was excusable.

(3) A member of an LLP commits an offence if he—

(a) fails to take all reasonable steps for securing compliance by the LLP with subsection (4) of that section (period for which records to be preserved), or

(b) intentionally causes any default by the LLP under that subsection.

(4) A person guilty of an offence under this section is liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);

(b) on summary conviction—

(i) in England and Wales, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both);

(ii) in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum (or both).

Section 7 An LLP's financial year

(1) Sections 390 to 392 apply to LLPs, modified so that they read as follows—

An LLP's financial year

(390)

(1) An LLP's financial year is determined as follows.

(2) Its first financial year—

(a) begins with the first day of its first accounting reference period, and

(b) ends with the last day of that period or such other date, not more than seven days before or after the end of that period, as the members of the LLP may determine.

(3) Subsequent financial years—

(a) begin with the day immediately following the end of the LLP's previous financial year, and

(b) end with the last day of its next accounting reference period or such other date, not more than seven days before or after the end of that period, as the members of the LLP may determine.

(4) In relation to an undertaking that is not an LLP, references in this Act to its financial year are to any period in respect of which a profit and loss account of the undertaking is required to be made up (by its constitution or by the law under which it is established), whether that period is a year or not.

(5) The members of a parent LLP must secure that, except where in their opinion there are good reasons against it, the financial year of each of its subsidiary undertakings coincides with the LLP's own financial year.

Accounting reference periods and accounting reference date

(391)

(1) An LLP's accounting reference periods are determined according to its accounting reference date in each calendar year.

(2) The accounting reference date of an LLP is the last day of the month in which the anniversary of its incorporation falls.

(3) An LLP's first accounting reference period is the period of more than six months, but not more than 18 months, beginning with the date of its incorporation and ending with its accounting reference date.

(4) Its subsequent accounting reference periods are successive periods of twelve months beginning immediately after the end of the previous accounting reference period and ending with its accounting reference date.

(5) This section has effect subject to the provisions of section 392 (alteration of accounting reference date).

Alteration of accounting reference date

(392)

(1) An LLP may by notice given to the registrar specify a new accounting reference date having effect in relation to—

(a) the LLP's current accounting reference period and subsequent periods, or

(b) the LLP's previous accounting reference period and subsequent periods.

An LLP's “ previous accounting reference period ” means the one immediately preceding its current accounting reference period.

(2) The notice must state whether the current or previous accounting reference period—

(a) is to be shortened, so as to come to an end on the first occasion on which the new accounting reference date falls or fell after the beginning of the period, or

(b) is to be extended, so as to come to an end on the second occasion on which that date falls or fell after the beginning of the period.

(3) A notice extending an LLP's current or previous accounting reference period is not effective if given less than five years after the end of an earlier accounting reference period of the LLP that was extended under this section. This does not apply—

(a) to a notice given by an LLP that is a subsidiary undertaking or parent undertaking of another UK undertaking if the new accounting reference date coincides with that of the other UK undertaking or, where that undertaking is not a company or an LLP, with the last day of its financial year, or

(b) where the LLP is in administration under Part 2 of the Insolvency Act 1986 (c.45) or Part 3 of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)), or

(c) where the Secretary of State directs that it should not apply, which he may do with respect to a notice that has been given or that may be given.

(4) A notice under this section may not be given in respect of a previous accounting reference period if the period for filing the accounts and auditor's report for the financial year determined by reference to that accounting reference period has already expired.

(5) An accounting reference period may not be extended so as to exceed 18 months and a notice under this section is ineffective if the current or previous accounting reference period as extended in accordance with the notice would exceed that limit. This does not apply where the LLP is in administration under Part 2 of the Insolvency Act 1986 (c.45) or Part 3 of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)).

(6) In this section “ UK undertaking ” means an undertaking established under the law of any part of the United Kingdom ...

(2) Until section 1068(1) comes fully into force, the notice referred to in section 392 (notice of alteration of accounting reference date) as applied to LLPs by paragraph (1) must be given in the form prescribed for the purposes of—

(a) section 225(1) of the 1985 Act as applied to LLPs by regulation 3 of, and Schedule 1 to, the Limited Liability Partnerships Regulations 2001 , or

(b) Article 233(1) of the 1986 Order as applied to LLPs by regulation 3 of, and Schedule 1 to, the Limited Liability Partnerships Regulations (Northern Ireland) 2004 .

Section 8 Annual accounts to give true and fair view

Section 393 applies to LLPs, modified so that it reads as follows—

Accounts to give true and fair view

(393)

(1) The members of an LLP must not approve accounts for the purposes of this Chapter unless they are satisfied that they give a true and fair view of the assets, liabilities, financial position and profit or loss—

(a) in the case of the LLP's individual accounts, of the LLP;

(b) in the case of the LLP's group accounts, of the undertakings included in the consolidation as a whole, so far as concerns members of the LLP.

(1A) Subsection (1B) applies to the members of an LLP which qualifies as a micro-entity in relation to a financial year (see sections 384A and 384B) in their consideration of whether the non-IAS individual accounts of the LLP for that year give a true and fair view as required by subsection (1)(a).

(1B) Where the accounts contain an item of information additional to the micro-entity minimum accounting items, the members must have regard to any provision of an accounting standard which relates to that item.

(2) The auditor of an LLP in carrying out his functions under this Act in relation to the LLP's annual accounts must have regard to the members' duty under subsection (1).

Section 9 Individual accounts

Sections 394 to 397 apply to LLPs, modified so that they read as follows—

Duty to prepare individual accounts

(394) The members of every LLP must prepare accounts for the LLP for each of its financial years unless the LLP is exempt from that requirement under section 394A . Those accounts are referred to as the LLP's “individual accounts”.

Individual accounts: exemption for dormant subsidiaries

(394A)

(1) An LLP is exempt from the requirement to prepare individual accounts in a financial year if—

(a) it is itself a subsidiary undertaking,

(b) it has been dormant throughout the whole of that year, and

(c) its parent undertaking is established under the law of any part of the United Kingdom .

(2) Exemption is conditional upon compliance with all of the following conditions—

(a) all members of the LLP must agree to the exemption in respect of the financial year in question,

(b) the parent undertaking must give a guarantee under section 394C in respect of that year,

(c) the LLP must be included in the consolidated accounts drawn up for that year or to an earlier date in that year by the parent undertaking in accordance with—

(i) if the undertaking is a company, the requirements of this Part of this Act, or, if the undertaking is not a company, the legal requirements which apply to the drawing up of consolidated accounts for that undertaking, or

(ii) UK-adopted international accounting standards ,

(d) the parent undertaking must disclose in the notes to the consolidated accounts that the LLP is exempt from the requirement to prepare individual accounts by virtue of this section,

(e) the designated members of the LLP must deliver to the registrar, within the period for filing the LLP’s account and auditor’s report for that year—

(i) a written notice of the agreement referred to in subsection (2)(a),

(ii) the statement referred to in section 394C(1),

(iii) a copy of the consolidated accounts referred to in subsection (2)(c),

(iv) a copy of the auditor’s report on those accounts, and

(v) a copy of the consolidated annual report drawn up by the parent undertaking.

LLPs excluded from the dormant subsidiaries exemption

(394B) An LLP is not entitled to the exemption conferred by section 394A (dormant subsidiaries) if it was at any time within the financial year in question—

(za) a traded LLP,

(a) an LLP that—

(i) is an authorised insurance company, a banking LLP, an e-money issuer, a MiFID investment firm or a UCITS management company, or

(ii) carries on insurance market activity, or

(b) an employers’ association as defined in section 122 of the Trade Union and Labour Relations (Consolidation) Act 1992 (c.52) or Article 4 of the Industrial Relations (Northern Ireland) Order 1992 (S.I. 1992/807) (NI 5).

Dormant subsidiaries exemption: parent undertaking declaration of guarantee

(394C)

(1) A guarantee is given by a parent undertaking under this section when the designated members of the subsidiary LLP deliver to the registrar a statement by the parent undertaking that it guarantees the subsidiary LLP under this section.

(2) The statement under subsection (1) must be authenticated by the parent undertaking and must specify—

(a) the name of the parent undertaking,

(b) the registered number of the parent undertaking (if any),

(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d) the name and registered number of the subsidiary LLP in respect of which the guarantee is being given,

(e) the date of the statement, and

(f) the financial year to which the guarantee relates.

(3) A guarantee given under this section has the effect that—

(a) the parent undertaking guarantees all outstanding liabilities to which the subsidiary LLP is subject at the end of the financial year to which the guarantee relates, until they are satisfied in full, and

(b) the guarantee is enforceable against the parent undertaking by any person to whom the subsidiary LLP is liable in respect of those liabilities.

Individual accounts: applicable accounting framework

(395)

(1) An LLP's individual accounts may be prepared—

(a) in accordance with section 396 (“non-IAS individual accounts”), or

(b) in accordance with UK-adopted international accounting standards (“IAS individual accounts”).

This is subject to the following provisions of this section and to section 407 (consistency of financial reporting within group).

(2) After the first financial year in which the members of an LLP prepare IAS individual accounts (“the first IAS year”), all subsequent individual accounts of the LLP must be prepared in accordance with UK-adopted international accounting standards unless there is a relevant change of circumstance. This is subject to subsection (3A).

(3) There is a relevant change of circumstance if, at any time during or after the first IAS year—

(a) the LLP becomes a subsidiary undertaking of another undertaking that does not prepare IAS individual accounts,

(b) the LLP ceases to be a subsidiary undertaking,

(c) the LLP ceases to be an LLP with securities admitted to trading on a UK regulated market , or

(d) a parent undertaking of the LLP ceases to be an undertaking with securities admitted to trading on a UK regulated market .

(3A) After a financial year in which the members of an LLP prepare IAS individual accounts, the members may change to preparing non-IAS individual accounts for a reason other than a relevant change of circumstance provided they have not changed to non-IAS individual accounts in the period of five years preceding the first day of that financial year.

(3B) In calculating the five year period for the purpose of subsection (3A), no account should be taken of a change due to a relevant change of circumstance.

(4) If, having changed to preparing non-IAS individual accounts ... , the members again prepare IAS individual accounts for the LLP, subsections (2) and (3) apply again as if the first financial year for which such accounts are again prepared were the first IAS year.

Non-IAS individual accounts

(396)

(A1) Non-IAS individual accounts must state—

(a) the part of the United Kingdom in which the LLP is registered,

(b) the LLP’s registered number,

(c) the address of the LLP’s registered office, and

(d) where appropriate, the fact that the LLP is being wound up.

(1) Non-IAS individual accounts must comprise—

(a) a balance sheet as at the last day of the financial year, and

(b) a profit and loss account.

(2) The accounts must—

(a) in the case of the balance sheet, give a true and fair view of the state of affairs of the LLP as at the end of the financial year, and

(b) in the case of the profit and loss account, give a true and fair view of the profit or loss of the LLP for the financial year.

(2A) In the case of the individual accounts of an LLP which qualifies as a micro-entity in relation to the financial year (see sections 384A and 384B), the micro-entity minimum accounting items included in the LLP’s accounts for the year are presumed to give the true and fair view required by subsection (2).

(3) The accounts must comply with the provisions of—

(a) regulation 3 of the Small Limited Liability Partnerships (Accounts) Regulations 2008 (non-IAS individual accounts of LLP subject to the small LLPs regime) (S.I. 2008/1912), or

(b) regulations 3 and 4 of the Large and Medium-sized Limited Liability Partnerships (Accounts) Regulations 2008 (non-IAS individual accounts of large and medium-sized LLPs) (S.I. 2008/1913),

as to the form and content of the balance sheet and profit and loss account, and additional information to be provided by way of notes to the accounts..

(4) If compliance with the regulations specified in subsection (3), and any other provision made by or under this Act as to the matters to be included in an LLP's individual accounts or in notes to those accounts, would not be sufficient to give a true and fair view, the necessary additional information must be given in the accounts or in a note to them.

(5) If in special circumstances compliance with any of those provisions is inconsistent with the requirement to give a true and fair view, the members must depart from that provision to the extent necessary to give a true and fair view. Particulars of any such departure, the reasons for it and its effect must be given in a note to the accounts.

(6) Subsections (4) and (5) do not apply in relation to the micro-entity minimum accounting items included in the individual accounts of an LLP for a financial year in relation to which the LLP qualifies as a micro-entity.

IAS individual accounts

(397)

(1) IAS individual accounts must state—

(a) the part of the United Kingdom in which the LLP is registered,

(b) the LLP’s registered number,

(c) the address of the LLP’s registered office, and

(d) where appropriate, the fact that the LLP is being wound up.

(2) The notes to the accounts must state that the accounts have been prepared in accordance with UK-adopted international accounting standards .

Section 10 Group accounts

Sections 398 to 408 apply to LLPs, modified so that they read as follows—

Option to prepare group accounts

(398) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Duty to prepare group accounts

(399)

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) If at the end of a financial year an LLP is a parent LLP the members, as well as preparing individual accounts for the year, must prepare group accounts for the year unless the LLP is exempt from that requirement.

(2A) An LLP is exempt from the requirement to prepare group accounts if—

(a) at the end of the financial year, the LLP is subject to the small LLPs regime, and

(b) is not a member of a group which, at any time during the financial year, has an undertaking falling within subsection (2B) as a member.

(2B) An undertaking falls within this subsection if—

(a) it is established under the law of any part of the United Kingdom ,

(b) it has to prepare accounts in accordance with the requirements of this Part of this Act , and

(c) it—

(i) is an undertaking whose transferable securities are admitted to trading on a UK regulated market,

(ii) is a credit institution within the meaning given by Article 4(1)(1) of Regulation (EU) No. 575/2013 of the European Parliament and of the Council, which is a CRR firm within the meaning of Article 4(1)(2A) of that Regulation, or

(iii) would be an insurance undertaking within the meaning given by Article 2(1) of Council Directive 91/674/EEC of the European Parliament and of the Council on the annual accounts of insurance undertakings were the United Kingdom a member State.

(3) There are exemptions under—

(a) section 400 (LLP included in UK accounts of larger group),

(b) section 401 (LLP included in non-UK accounts of larger group), and

(c) section 402 (LLP none of whose subsidiary undertakings need be included in the consolidation).

(4) An LLP ... which is exempt from the requirement to prepare group accounts, may do so.

Exemption for LLP included in UK group accounts of larger group

(400)

(1) An LLP is exempt from the requirement to prepare group accounts if it is itself a subsidiary undertaking and its immediate parent undertaking is established under the law of any part of the United Kingdom , in the following cases—

(a) where the LLP is a wholly-owned subsidiary of that parent undertaking;

(b) where that parent undertaking holds 90% or more of the shares in the LLP and the remaining members have approved the exemption;

(c) where that parent undertaking holds more than 50% (but less than 90%) of the shares in the LLP and notice requesting the preparation of group accounts has not been served on the LLP by the members holding in aggregate at least 5% of the shares in the LLP.

Such notice must be served at least six months before the end of the financial year to which it relates.

Such notice must be served not later than six months after the end of the financial year before that to which it relates.

(2) Exemption is conditional upon compliance with all of the following conditions—

(a) the LLP must be included in consolidated accounts for a larger group drawn up to the same date, or to an earlier date in the same financial year, by a parent undertaking established under the law of any part of the United Kingdom ;

(b) those accounts must be drawn up and audited, and that parent undertaking's annual report must be drawn up ... —

(i) if the undertaking is a company, in accordance with the requirements of this Part of this Act, or, if the undertaking is not a company, the legal requirements which apply to the drawing up of consolidated accounts for that undertaking, or

(ii) in accordance with UK-adopted international accounting standards ;

(c) the LLP must disclose in the notes to its individual accounts that it is exempt from the obligation to prepare and deliver group accounts;

(d) the LLP must state in its individual accounts the name of the parent undertaking that draws up the group accounts referred to above and—

(i) the address of the undertaking’s registered office ... , or

(ii) if it is unincorporated, the address of its principal place of business;

(e) the LLP must deliver to the registrar, within the period for filing its accounts and auditor's report for the financial year in question, copies of those group accounts, together with the auditor's report on them;

(f) any requirement of Part 35 of this Act as to the delivery to the registrar of a certified translation into English must be met in relation to any document comprised in the accounts and reports delivered in accordance with paragraph (e).

(3) For the purposes of subsection (1)(b) and (c) shares held by a wholly-owned subsidiary of the parent undertaking, or held on behalf of the parent undertaking or a wholly-owned subsidiary, shall be attributed to the parent undertaking.

(4) The exemption does not apply to an LLP which is a traded LLP .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exemption for LLP included in non-UK group accounts of larger group

(401)

(1) An LLP is exempt from the requirement to prepare group accounts if it is itself a subsidiary undertaking and its parent undertaking is not established under the law of any part of the United Kingdom , in the following cases—

(a) where the LLP is a wholly-owned subsidiary of that parent undertaking;

(b) where that parent undertaking holds 90% or more of the shares in the LLP and the remaining members have approved the exemption;

(c) where that parent undertaking holds more than 50% (but less than 90%) of the shares in the LLP and notice requesting the preparation of group accounts has not been served on the LLP by the members holding in aggregate at least 5% of the shares in the LLP.

Such notice must be served not later than six months after the end of the financial year before that to which it relates.

(2) Exemption is conditional upon compliance with all of the following conditions—

(a) the LLP and all of its subsidiary undertakings must be included in consolidated accounts for a larger group drawn up to the same date, or to an earlier date in the same financial year, by a parent undertaking;

(b) those accounts must be drawn up—

(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ii) in a manner equivalent to consolidated accounts drawn up in accordance with the requirements of this Part of this Act ,

(iii) in accordance with UK-adopted international accounting standards , or

(iv) in accordance with accounting standards which are equivalent to such international accounting standards, as determined pursuant to Commission Regulation (EC) No. 1569/2007 of 21 December 2007 establishing a mechanism for the determination of equivalence of accounting standards applied by third country issuers of securities pursuant to Directives 2003/71/EC and 2004/109/EC of the European Parliament and of the Council;

(c) the group accounts must be audited by one or more persons authorised to audit accounts under the law under which the parent undertaking which draws them up is established;

(d) the LLP must disclose in its individual accounts that it is exempt from the obligation to prepare and deliver group accounts;

(e) the LLP must state in its individual accounts the name of the parent undertaking which draws up the group accounts referred to above and—

(i) the address of the undertaking’s registered office (whether in or outside the United Kingdom), or

(ii) if it is unincorporated, the address of its principal place of business;

(f) the LLP must deliver to the registrar, within the period for filing its accounts and auditor's report for the financial year in question, copies of the group accounts, together with the auditor's report on them;

(g) any requirement of Part 35 of this Act as to the delivery to the registrar of a certified translation into English must be met in relation to any document comprised in the accounts and reports delivered in accordance with paragraph (f).

(3) For the purposes of subsection (1)(b) and (c) shares held by a wholly-owned subsidiary of the parent undertaking, or held on behalf of the parent undertaking or a wholly-owned subsidiary, shall be attributed to the parent undertaking.

(4) The exemption does not apply to an LLP which is a traded LLP .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exemption if no subsidiary undertakings need be included in the consolidation

(402) A parent LLP is exempt from the requirement to prepare group accounts if under section 405 all of its subsidiary undertakings could be excluded from consolidation in non-IAS group accounts.

Group accounts: applicable accounting framework

(403)

(1) The group accounts of a parent LLP may be prepared—

(a) in accordance with section 404 (“ non-IAS group accounts”), or

(b) in accordance with UK-adopted international accounting standards (“IAS group accounts”).

This is subject to the following provisions of this section.

(2) After the first financial year in which the members of a parent LLP prepare IAS group accounts (“the first IAS year”), all subsequent group accounts of the LLP must be prepared in accordance with UK-adopted international accounting standards unless there is a relevant change of circumstance. This is subject to subsection (3A).

(3) There is a relevant change of circumstance if, at any time during or after the first IAS year—

(a) the LLP becomes a subsidiary undertaking of another undertaking that does not prepare IAS group accounts,

(b) the LLP ceases to be an LLP with securities admitted to trading on a UK regulated market , or

(c) a parent undertaking of the LLP ceases to be an undertaking with securities admitted to trading on a UK regulated market .

(3A) After a financial year in which the members of a parent LLP prepare IAS group accounts, the members may change to preparing non-IAS group accounts for a reason other than a relevant change of circumstance provided they have not changed to non-IAS group accounts in the period of five years preceding the first day of that financial year.

(3B) In calculating the five year period for the purpose of subsection (3A), no account should be taken of a change due to a relevant change of circumstance.

(4) If, having changed to preparing non-IAS group accounts ... , the members again prepare IAS group accounts for the LLP, subsections (2) and (3) apply again as if the first financial year for which such accounts are again prepared were the first IAS year.

Non-IAS group accounts

(404)

(A1) Non-IAS group accounts must state, in respect of the parent LLP—

(a) the part of the United Kingdom in which the LLP is registered,

(b) the LLP’s registered number,

(c) the address of the LLP’s registered office, and

(d) where appropriate, the fact that the LLP is being wound up.

(1) Non-IAS group accounts must comprise—

(a) a consolidated balance sheet dealing with the state of affairs of the parent LLP and its subsidiary undertakings, and

(b) a consolidated profit and loss account dealing with the profit or loss of the parent LLP and its subsidiary undertakings.

(2) The accounts must give a true and fair view of the state of affairs as at the end of the financial year, and the profit or loss for the financial year, of the undertakings included in the consolidation as a whole, so far as concerns members of the LLP.

(3) The accounts must comply with the provisions of—

(a) regulation 6 of the Small Limited Liability Partnerships (Accounts) Regulations 2008 (non-IAS group accounts of small parent LLP opting to prepare group accounts) (S.I. 2008/1912), or

(b) regulation 6 of the Large and Medium-sized Limited Liability Partnerships (Accounts) Regulations 2008 (non-IAS group accounts of large and medium-sized parent LLPs) (S.I. 2008/1913),

as to the form and content of the consolidated balance sheet and consolidated profit and loss account, and additional information to be provided by way of notes to the accounts..

(4) If compliance with the regulations specified in subsection (3), and any other provision made by or under this Act as to the matters to be included in an LLP's group accounts or in notes to those accounts, would not be sufficient to give a true and fair view, the necessary additional information must be given in the accounts or in a note to them.

(5) If in special circumstances compliance with any of those provisions is inconsistent with the requirement to give a true and fair view, the members must depart from that provision to the extent necessary to give a true and fair view. Particulars of any such departure, the reasons for it and its effect must be given in a note to the accounts.

Non-IAS group accounts: subsidiary undertakings included in the consolidation

(405)

(1) Where a parent LLP prepares non-IAS group accounts, all the subsidiary undertakings of the LLP must be included in the consolidation, subject to the following exceptions.

(2) A subsidiary undertaking may be excluded from consolidation if its inclusion is not material for the purpose of giving a true and fair view (but two or more undertakings may be excluded only if they are not material taken together).

(3) A subsidiary undertaking may be excluded from consolidation where—

(a) severe long-term restrictions substantially hinder the exercise of the rights of the parent LLP over the assets or management of that undertaking, or

(b) extremely rare circumstances mean that the information necessary for the preparation of group accounts cannot be obtained without disproportionate expense or undue delay, or

(c) the interest of the parent LLP is held exclusively with a view to subsequent resale.

(4) The reference in subsection (3)(a) to the rights of the parent LLP and the reference in subsection (3)(c) to the interest of the parent LLP are, respectively, to rights and interests held by or attributed to the LLP for the purposes of the definition of “parent undertaking” (see section 1162) in the absence of which it would not be the parent LLP.

IAS group accounts

(406)

(1) IAS group accounts must state—

(a) the part of the United Kingdom in which the LLP is registered,

(b) the LLP’s registered number,

(c) the address of the LLP’s registered office, and

(d) where appropriate, the fact that the LLP is being wound up.

(2) The notes to the accounts must state that the accounts have been prepared in accordance with UK-adopted international accounting standards .

Consistency of financial reporting within group

(407)

(1) The members of a parent LLP must secure that the individual accounts of—

(a) the parent LLP, and

(b) each of its subsidiary undertakings,

are all prepared using the same financial reporting framework, except to the extent that in their opinion there are good reasons for not doing so.

(2) Subsection (1) does not apply if the members do not prepare group accounts for the parent LLP.

(3) Subsection (1) only applies to accounts of subsidiary undertakings that are required to be prepared under this Part.

(4) Subsection (1)(a) does not apply where the members of a parent LLP prepare IAS group accounts and IAS individual accounts.

Individual profit and loss account where group accounts prepared

(408)

(1) This section applies where—

(a) an LLP prepares group accounts in accordance with this Act, and

(b) the LLP’s individual balance sheet shows the LLP’s profit and loss for the financial year determined in accordance with this Act.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The LLP's individual profit and loss account must be approved in accordance with section 414(1) (approval by members) but may be omitted from the LLP's annual accounts for the purposes of the other provisions of this Act.

(4) The exemption conferred by this section is conditional upon its being disclosed in the LLP's annual accounts that the exemption applies.

Section 11 Information to be given in notes to accounts

Sections 409, 410A and 411 apply to LLPs , modified so that they read as follows—

Information about related undertakings

(409)

(1) The notes to the LLP's annual accounts must contain the information about related undertakings required by—

(a) regulations 4 and 7 of the Small Limited Liability Partnerships (Accounts) Regulations 2008 (information about related undertakings: non-IAS or IAS individual or group accounts) (S.I. 2008/1912), or

(b) regulation 5 of the Large and Medium-sized Limited Liability Partnerships (Accounts) Regulations 2008 (information about related undertakings: non-IAS or IAS individual or group accounts) (S.I. 2008/1913).

(2) That information need not be disclosed with respect to an undertaking that—

(a) is established under the law of a country outside the United Kingdom, or

(b) carries on business outside the United Kingdom,

if the following conditions are met.

(4) The conditions are—

(a) that in the opinion of the members of the LLP the disclosure would be seriously prejudicial to the business of—

(i) that undertaking,

(ii) the LLP,

(iii) any of the LLP's subsidiary undertakings, or

(iv) any other undertaking which is included in the consolidation;

(b) that the Secretary of State agrees that the information need not be disclosed.

(5) Where advantage is taken of any such exemption, that fact must be stated in a note to the LLP's annual accounts.

Information about related undertakings: alternative compliance

(410) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Information about off-balance sheet arrangements

(410A)

(1) If in any financial year—

(a) an LLP is or has been party to arrangements that are not reflected in its balance sheet, and

(b) at the balance sheet date the risks or benefits arising from those arrangements are material,

the information required by this section must be given in the notes to the LLP ’s annual accounts.

(2) The information required is—

(a) the nature and business purpose of the arrangements, and

(b) the financial impact of the arrangements on the LLP.

(3) The information need only be given to the extent necessary for enabling the financial position of the LLP to be assessed.

(4) If the LLP is subject to the small LLPs regime in relation to the financial year (see section 381), it need not comply with subsection (2)(b).

(5) This section applies in relation to group accounts as if the undertakings included in the consolidation were a single LLP.

Information about employee numbers and costs

(411)

(1) The notes to an LLP ’s annual accounts must disclose the average number of persons employed by the LLP in the financial year.

(1A) In the case of an LLP not subject to the small LLPs regime, the notes to the LLP ’s accounts must also disclose the average number of persons within each category of persons so employed.

(2) The categories by reference to which the number required to be disclosed by subsection (1A) is to be determined must be such as the members may select having regard to the manner in which the LLP's activities are organised.

(3) The average number required by subsection (1) or (1A) is determined by dividing the relevant annual number by the number of months in the financial year.

(4) The relevant annual number is determined by ascertaining for each month in the financial year—

(a) for the purposes of subsection (1) , the number of persons employed under contracts of service by the LLP in that month (whether throughout the month or not);

(b) for the purposes of subsection (1A) , the number of persons in the category in question of persons so employed;

and adding together all the monthly numbers.

(5) Except in the case of an LLP subject to the small LLPs regime, the notes to the LLP ’s annual accounts or the profit and loss account must disclose, with reference to all persons employed by the LLP during the financial year, the total staff costs of the LLP relating to the financial year broken down between—

(a) wages and salaries paid or payable in respect of that year to those persons,

(b) social security costs incurred by the LLP on their behalf, and

(c) other pension costs so incurred.

(6) In subsection (5)—

“ pension costs ” includes any costs incurred by the LLP in respect of—

any pension scheme established for the purpose of providing pensions for persons currently or formerly employed by the LLP,

any sums set aside for the future payment of pensions directly by the LLP to current or former employees, and

any pensions paid directly to such persons without having first been set aside;

“ social security costs ” means any contributions by the LLP to any state social security or pension scheme, fund or arrangement.

(7) This section applies in relation to group accounts as if the undertakings included in the consolidation were a single LLP.

Section 12 Approval and signing of accounts

Section 414 applies to LLPs, modified so that it reads as follows—

Approval and signing of accounts

(414)

(1) An LLP's annual accounts must be approved by the members, and signed on behalf of all the members by a designated member.

(2) The signature must be on the LLP's balance sheet.

(3) If the accounts are prepared in accordance with the small LLPs regime, the balance sheet must contain, in a prominent position above the signature—

(a) in the case of individual accounts prepared in accordance with the micro-entity provisions, a statement to that effect,

(b) in the case of accounts not prepared as mentioned in paragraph (a), a statement to the effect that the accounts have been prepared in accordance with the provisions applicable to LLPs subject to the small LLPs regime.

(4) If annual accounts are approved that do not comply with the requirements of this Act, every member of the LLP who—

(a) knew that they did not comply, or was reckless as to whether they complied, and

(b) failed to take reasonable steps to secure compliance with those requirements or, as the case may be, to prevent the accounts from being approved,

commits an offence.

(5) A person guilty of an offence under this section is liable—

(a) on conviction on indictment, to a fine;

(b) on summary conviction, to a fine not exceeding the statutory maximum.

Section 12A Strategic report

Sections 414A, 414C and 414D apply to LLPs, modified so that they read as follows—

Duty to prepare strategic report

(414A)

(1) The members of an LLP which is—

(a) a traded LLP, or

(b) a banking LLP,

must prepare a strategic report for each financial year of the LLP.

(2) For a financial year in which—

(a) the LLP is a parent LLP, and

(b) the members of the LLP prepare group accounts,

the strategic report must be a consolidated report (a “group strategic report”) relating to the undertakings included in the consolidation.

(3) A group strategic report may, where appropriate, give greater emphasis to the matters that are significant to the undertakings included in the consolidation, taken as a whole.

(4) In the case of failure to comply with the requirement to prepare a strategic report, an offence is committed by every person who—

(a) was a member of the LLP immediately before the end of the period for filing accounts and reports for the financial year in question, and

(b) failed to take all reasonable steps for securing compliance with that requirement.

(5) A person guilty of an offence under this section is liable—

(a) on conviction on indictment, to a fine;

(b) on summary conviction, to a fine not exceeding the statutory maximum.

Contents of strategic report

(414C)

(1) The strategic report of a traded LLP and of a banking LLP—

(a) must contain a fair review of the LLP’s business and a description of the principal risks and uncertainties facing the LLP; and

(b) where subsection (1A) applies, must in addition to the information described in paragraph (a), contain climate-related financial disclosures.

(1A) This subsection applies to any traded LLP or banking LLP which, in the relevant year to which the strategic report relates, either—

(a) has more than 500 employees; or

(b) is a parent LLP and the aggregate number of employees for a group headed by the LLP is more than 500.

(1B) For the purposes of subsection (1A), the number of employees of an LLP or of a group headed by an LLP means the average number of persons employed by the LLP or the group headed by the LLP in the year, determined as follows—

(a) find for each month in the financial year the number of persons employed under contracts of service by the LLP or the group headed by the LLP in that month (whether throughout the month or not);

(b) add together the monthly totals; and

(c) divide by the number of months in the financial year.

(2) The review required is a balanced and comprehensive analysis of—

(a) the development and performance of the LLP’s business during the financial year, and

(b) the position of the LLP’s business at the end of that year,

consistent with the size and complexity of the business.

(3) The review must, to the extent necessary for an understanding of the development, performance or position of the LLP’s business, include—

(a) analysis using financial key performance indicators, and

(b) where appropriate, analysis using other key performance indicators, including information relating to environmental matters and employee matters.

(4) In subsection (3), “key performance indicators” means factors by reference to which the development, performance or position of the LLP’s business can be measured effectively.

(4A) In this section and section 416A, “climate-related financial disclosures” means—

(a) a description of the LLP’s governance arrangements in relation to assessing and managing climate-related risks and opportunities;

(b) a description of how the LLP identifies, assesses, and manages climate-related risks and opportunities;

(c) a description of how processes for identifying, assessing, and managing climate-related risks are integrated into the LLP’s overall risk management process;

(d) a description of—

(i) the principal climate-related risks and opportunities arising in connection with the LLP’s operations, and

(ii) the time periods by reference to which those risks and opportunities are assessed;

(e) a description of the actual and potential impacts of the principal climate-related risks and opportunities on the LLP’s business model and strategy;

(f) an analysis of the resilience of the LLP’s business model and strategy, taking into consideration different climate-related scenarios;

(g) a description of the targets used by the LLP to manage climate-related risks and to realise climate-related opportunities and of performance against those targets; and

(h) a description of the key performance indicators used to assess progress against targets used to manage climate-related risks and realise climate-related opportunities and of the calculations on which those key performance indicators are based.

(4B) Where the members of an LLP reasonably believe that, having regard to the nature of the LLP’s business, and the manner in which it is carried on, the whole or a part of a climate-related financial disclosure required by subsection (4A)(e), (f), (g) or (h) is not necessary for an understanding of the LLP’s business, the members may omit the whole or (as the case requires) the relevant part of that climate-related financial disclosure.

(4C) Where the members omit the whole or part of a climate-related financial disclosure in reliance on subsection (4B) the strategic report must provide a clear and reasoned explanation of the members’ reasonable belief mentioned in that subsection.

(4D) The Secretary of State may issue guidance on the climate-related financial disclosures, which are described in subsection (4A), and otherwise in connection with the requirements of this section.

(5) The report must, where appropriate, include references to, and additional explanations of, amounts included in the LLP’s annual accounts.

(6) In relation to a group strategic report this section has effect as if the references to the LLP were references to the undertakings included in the consolidation.

(7) Nothing in this section requires the disclosure of information about impending developments or matters in the course of negotiation if the disclosure would, in the opinion of the members, be seriously prejudicial to the interests of the LLP.

Approval and signing of strategic report

(414D)

(1) The strategic report must be approved by the members and signed on behalf of all the members by a designated member.

(2) If a strategic report is approved that does not comply with the requirements of this Act, every member who–

(a) knew that it did not comply, or was reckless as to whether it complied, and

(b) failed to take reasonable steps to secure compliance with those requirements or, as the case may be, to prevent the report from being approved,

commits an offence.

(3) A person guilty of an offence under this section is liable—

(a) on conviction on indictment, to a fine;

(b) on summary conviction, to a fine not exceeding the statutory maximum.

Section 12B Energy and carbon report

Sections 415, 415A, 416 and 419 apply to LLPs, modified so that they read as follows—

Duty to prepare energy and carbon report

(415)

(1) Unless the LLP is exempted under section 415A(1) or (4), and subject to subsection (4), the members of an LLP must prepare an energy and carbon report for each financial year of the LLP.

(2) For a financial year in which—

(a) the LLP is a parent LLP , and

(b) the members of the LLP prepare group accounts,

the energy and carbon report must be a consolidated report (“a group energy and carbon report”) relating to the undertakings included in the consolidation.

(3) A group energy and carbon report may, where appropriate, give greater emphasis to the matters that are significant to the undertakings included in the consolidation, taken as a whole.

(4) Subsection (1) does not apply if—

(a) the LLP is a subsidiary undertaking at the end of the financial year;

(b) the LLP is included in the group report of a parent undertaking;

(c) the group report is prepared for a financial year of the parent undertaking that ends at the same time as, or before the end of, the LLP ’s financial year; and—

(i) if the group report is a group energy and carbon report, it complies with Part 7A of Schedule 7 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 as applied and modified by regulation 12B of the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008 other than in reliance on paragraph 20D(7)(b); or

(ii) if the group report is a group directors’ report—

(aa) of a quoted company, it complies with Part 7 of Schedule 7 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 other than in reliance on paragraph 15(5)(b); or

(bb) of an unquoted company it complies with Part 7A of Schedule 7 to those Regulations other than in reliance on paragraph 20D(7)(b).

(5) For the purpose of subsection (4)—

“group directors’ report” means a report prepared in accordance with section 415(2);

“quoted company” and “unquoted company” have the meanings given in section 385.

(6) In the case of failure to comply with the requirement to prepare an energy and carbon report, an offence is committed by every person who—

(a) was a member of the LLP immediately before the end of the period for filing accounts and reports for the financial year in question; and

(b) failed to take all reasonable steps for securing compliance with that requirement.

(7) A person guilty of an offence under this section is liable—

(a) on conviction on indictment, to a fine;

(b) on summary conviction—

(i) in England and Wales, to a fine;

(ii) in Scotland or Northern Ireland, to a fine not exceeding the statutory maximum.

Exemption to duty to prepare energy and carbon report

(415A)

(1) Unless the LLP is a parent LLP , an LLP is exempted under this subsection—

(a) in relation to its first financial year if the qualifying conditions in subsection (2) are met in that year;

(b) in relation to a subsequent financial year—

(i) if the qualifying conditions are met in that year and were also met in relation to the preceding financial year;

(ii) if—

(aa) the qualifying conditions are met in that year, and

(bb) the LLP was exempted in relation to the preceding financial year; or

(iii) if—

(aa) the qualifying conditions were met in the preceding financial year, and

(bb) the LLP was exempted in relation to the preceding financial year.

(2) The qualifying conditions referred to in subsection (1) are met by an LLP in a year in which it satisfies two or more of the following requirements—

(3) For the purposes of subsection (2)—

(a) for a period that is an LLP ’s financial year but not in fact a year the figure for turnover must be proportionately adjusted;

(b) the balance sheet total means the aggregate of the amounts shown as assets in the LLP ’s balance sheet;

(c) the number of employees means the average number of persons employed by the LLP in the year, determined as follows—

(i) find for each month in the financial year the number of persons employed under contracts of service by the LLP in that month (whether throughout the month or not),

(ii) add together the monthly totals, and

(iii) divide by the number of months in the financial year.

(4) A parent LLP is exempted under this subsection—

(a) in relation to the parent LLP ’s first financial year if the qualifying conditions in subsection (5) are met in that year by the group headed by it;

(b) in relation to a subsequent financial year of the parent LLP —

(i) if the qualifying conditions are met in that year and the preceding financial year by the group headed by the parent LLP ;

(ii) if—

(aa) the qualifying conditions are met in that year by the group, and

(bb) the parent LLP was exempted in relation to the preceding financial year; or

(iii) if—

(aa) the qualifying conditions were met in the preceding financial year by the group, and

(bb) the parent LLP was exempted in relation to the preceding financial year.

(5) The qualifying conditions referred to in subsection (4) are met by a group in a year in which it satisfies two or more of the following requirements—

(6) For the purposes of subsection (5), the aggregate figures are to be ascertained by aggregating the relevant figures determined in accordance with subsections (1) to (3) for each member of the group.

(7) In relation to the aggregate figures for turnover and balance sheet total—

(a) “net” means after any set-offs and other adjustments made to eliminate group transactions—

(i) in the case of non-IAS accounts, in accordance with Schedule 3 to the Large and Medium-sized Limited Liability Partnerships (Accounts) Regulations 2008;

(ii) in the case of IAS accounts, in accordance with international accounting standards; and

(b) “gross” means without those set-offs and other adjustments.

(8) An LLP may satisfy any requirements in subsection (5) on the basis of either the net or the gross figure.

(9) For the purposes of subsection (5)—

(a) the figures for each subsidiary undertaking must be those included in its individual accounts for the relevant financial year, that is—

(i) if its financial year ends with that of the parent LLP , that financial year, and

(ii) if not, its financial year ending last before the end of the financial year of the parent LLP ; or

(b) if those figures cannot be obtained without disproportionate expense or undue delay, the latest available figures may be taken.

Contents of energy and carbon report

(416)

(1) The energy and carbon report for a financial year must state—

(a) the names of the persons who, at any time during the financial year, were members of the LLP ; and

(b) the name of the designated member signing the report in accordance with section 419.

(2) Regulation 10(1) and Part 7A of Schedule 7 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 apply to LLPs with the following modifications—

(a) in regulation 10(1)—

(i) for “directors of a company”, substitute “members of an LLP ”;

(ii) for “directors’ report”, substitute “energy and carbon report”;

(iii) for “Schedule 7”, substitute “Part 7A of Schedule 7”;

(b) in Part 7A—

(i) in the heading, omit “by unquoted companies”;

(ii) for paragraph 20A(1), substitute “This Part of this Schedule applies to the energy and carbon report for a financial year.”;

(iii) omit paragraphs 20A(2) and (3), 20B and 20C;

(iv) in paragraphs 20D, 20E(1) and 20E(3), for each reference to “company” except on the third and fourth occasion it appears in paragraph 20E(1) and where it appears in paragraphs 20E(3)(a) and (b), substitute “ LLP ”;

(v) in paragraphs 20D and 20G, for each reference to “company’s”, substitute “ LLP ’s”;

(vi) in paragraphs 20D, 20F, 20G, 20H, 20I and 20J, for each reference to “directors’ report”, substitute “energy and carbon report”;

(vii) in paragraph 20D(7)(b), for the reference to “directors”, substitute “members”;

(viii) in paragraph 20E(1), for the reference to “group directors’ report”, substitute “group energy and carbon report”;

(ix) in paragraphs 20E(2) and (3)(a) and 20K, for each reference to “Part 7 of this Schedule”, substitute “Part 7 of Schedule 7 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008”;

(x) in paragraph 20E(3)(b), for the reference to “this Part of this Schedule”, substitute “Part 7A of Schedule 7 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008”;

(xi) for paragraph 20E(4), substitute “For the purpose of this paragraph, “quoted company” and “unquoted company” have the meanings given in section 385.”.

Climate-related financial disclosures in the energy and carbon report

(416A)

(1) The energy and carbon report of a large LLP for a financial year must set out climate-related financial disclosures.

(2) A “large LLP” means—

(a) an LLP which is not a traded LLP nor a banking LLP;

(b) where in the relevant financial year—

(i) the LLP is not a parent LLP, an LLP which has more than 500 employees and an annual turnover of more than £500 million;

(ii) the LLP is a parent LLP, the aggregate number of employees for a group headed by that LLP is more than 500 and the group headed by it has an annual turnover of more £500 million.

(3) For the purposes of subsection (2), the number of employees of an LLP or of a group headed by an LLP means the average number of persons employed by the LLP or the group headed by the LLP in the year, determined as follows—

(a) find for each month in the financial year the number of persons employed under contracts of service by the LLP or the group headed by the LLP in that month (whether throughout the month or not);

(b) add together the monthly totals; and

(c) divide by the number of months in the financial year.

(4) For a period that is an LLP’s financial year but not in fact a year the figure of £500 million for annual turnover given by subsection (2) must be proportionately adjusted.

(5) If the LLP’s energy and carbon report is a group energy and carbon report, the figures for each subsidiary undertaking must be those included in its individual accounts for the relevant financial year, that is—

(a) if its financial year ends with that of the parent LLP, that financial year; and

(b) if not, its financial year ending last before the end of the financial year of the parent LLP.

(6) If the figures referred to in paragraph (5) cannot be obtained without disproportionate expense or undue delay, the latest available figures must be taken.

(7) In this section, “climate-related financial disclosures” has the same meaning as set out in section 414C(4A).

(8) Where the members of an LLP reasonably believe that, having regard to the nature of the LLP’s business, and the manner in which it is carried on, the whole or a part of a climate-related financial disclosure described in subsection 414C(4A)(e), (f), (g) or (h) is not necessary for an understanding of the LLP’s business, the members may omit the whole or (as the case requires) the relevant part of that climate-related financial disclosure.

(9) Where the members omit the whole or part of a climate-related financial disclosure in reliance on subsection (8) the strategic report must provide a clear and reasoned explanation of the members’ reasonable belief mentioned in that subsection.

(10) The Secretary of State may issue guidance on the climate-related financial disclosures, which are required by subsection (1), and otherwise in connection with the requirements of this section.

Approval and signing of energy and carbon report

(419)

(1) The energy and carbon report must be approved by the members and signed on behalf of all the members by a designated member.

(2) If an energy and carbon report is approved that does not comply with the requirements of this Act, every member who—

(a) knew that it did not comply, or was reckless as to whether it complied, and

(b) failed to take reasonable steps to secure compliance with those requirements or, as the case may be, to prevent the report from being approved,

commits an offence.

(3) A person guilty of an offence under this section is liable—

(a) on conviction on indictment, to a fine;

(b) on summary conviction—

(i) in England and Wales, to a fine;

(ii) in Scotland or Northern Ireland, to a fine not exceeding the statutory maximum.

Section 13 Publication of annual accounts and reports

Section 423 applies to LLPs, modified so that it reads as follows—

Duty to circulate copies of annual accounts and reports

(423)

(1) Every LLP must send a copy of its annual accounts and reports for each financial year to—

(a) every member of the LLP, and

(b) every holder of the LLP's debentures,

not later than the end of the period for filing accounts , the strategic report (if any) , the auditor’s report on them and the energy and carbon report , or, if earlier, the date on which it actually delivers its accounts , the strategic report (if any) and the auditor's report on those accounts and that strategic report and the energy and carbon report (if any) to the registrar.

(2) Copies need not be sent to a person for whom the LLP does not have a current address.

(3) An LLP has a “current address” for a person if—

(a) an address has been notified to the LLP by the person as one at which documents may be sent to him, and

(b) the LLP has no reason to believe that documents sent to him at that address will not reach him.

(4) Where copies are sent out over a period of days, references in this Act to the day on which copies are sent out shall be read as references to the last day of that period.

Section 14 Default in sending out copies of accounts and reports

Section 425 applies to LLPs, modified so that it reads as follows—

Default in sending out copies of accounts and reports : offences

(425)

(1) If default is made in complying with section 423, an offence is committed by—

(a) the LLP, and

(b) every member of the LLP who is in default.

(2) A person guilty of an offence under this section is liable—

(a) on conviction on indictment, to a fine;

(b) on summary conviction, to a fine not exceeding the statutory maximum.

Section 15 Right of member or debenture holder to copies of accounts and reports

Section 431 applies to LLPs, modified so that it reads as follows—

Right of member or debenture holder to copies of accounts and reports

(431)

(1) A member of, or holder of debentures of, an LLP is entitled to be provided, on demand and without charge, with a copy of—

(a) the LLP's last annual accounts, ...

(aa) the last strategic report (if any),

(b) the auditor's report on those accounts (including the statement (where applicable) on that strategic report) , and

(c) the last energy and carbon report (if any).

(2) The entitlement under this section is to a single copy of those documents, but that is in addition to any copy to which a person may be entitled under section 423.

(3) If a demand made under this section is not complied with within seven days of receipt by the LLP, an offence is committed by—

(a) the LLP, and

(b) every member of the LLP 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.

Section 16 Requirements in connection with publication of accounts and reports

Sections 433 to 436 apply to LLPs, modified so that they read as follows—

Name of signatory to be stated in published copies of accounts and reports

(433)

(1) Every copy of the LLP's balance sheet , strategic report and energy and carbon report that is published by or on behalf of the LLP must state the name of the person who signed it on behalf of the members of the LLP.

(2) If a copy is published without the required statement of the signatory's name, an offence is committed by—

(a) the LLP, and

(b) every member of the LLP who is in default.

(3) 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.

Requirements in connection with publication of statutory accounts

(434)

(1) If an LLP publishes any of its statutory accounts, they must be accompanied by the auditor's report on those accounts (unless the LLP is exempt from audit and the members have taken advantage of that exemption).

(2) An LLP that prepares statutory group accounts for a financial year must not publish its statutory individual accounts for that year without also publishing with them its statutory group accounts.

(3) An LLP's “statutory accounts” are its accounts for a financial year as required to be delivered to the registrar under section 441.

(4) If an LLP contravenes any provision of this section, an offence is committed by—

(a) the LLP, and

(b) every member of the LLP who is in default.

(5) 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.

Requirements in connection with publication of non-statutory accounts

(435)

(1) If an LLP publishes non-statutory accounts, it must publish with them a statement indicating—

(a) that they are not the LLP's statutory accounts,

(b) whether statutory accounts dealing with any financial year with which the non-statutory accounts purport to deal have been delivered to the registrar, and

(c) whether an auditor's report has been made on the LLP's statutory accounts for any such financial year, and if so whether the report—

(i) was qualified or unqualified, or included a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report, or

(ii) contained a statement under section 498(2) (accounting records or returns inadequate or accounts not agreeing with records and returns), or section 498(3) (failure to obtain necessary information and explanations).

(2) The LLP must not publish with non-statutory accounts the auditor's report on the LLP's statutory accounts.

(3) References in this section to the publication by an LLP of “non-statutory accounts” are to the publication of—

(a) any balance sheet or profit and loss account relating to, or purporting to deal with, a financial year of the LLP, or

(b) an account in any form purporting to be a balance sheet or profit and loss account for a group headed by the LLP relating to, or purporting to deal with, a financial year of the LLP,

otherwise than as part of the LLP's statutory accounts.

(4) In subsection (3)(b) “ a group headed by the LLP ” means a group consisting of the LLP and any other undertaking (regardless of whether it is a subsidiary undertaking of the LLP) other than a parent undertaking of the LLP.

(5) If an LLP contravenes any provision of this section, an offence is committed by—

(a) the LLP, and

(b) every member of the LLP who is in default.

(6) 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.

Meaning of “ publication ” in relation to accounts and reports

(436)

(1) This section has effect for the purposes of—

section 433 (name of signatory to be stated in published copies of accounts and reports ),

section 434 (requirements in connection with publication of statutory accounts), and

section 435 (requirements in connection with publication of non-statutory accounts).

(2) For the purposes of those sections an LLP is regarded as publishing a document if it publishes, issues or circulates it or otherwise makes it available for public inspection in a manner calculated to invite members of the public generally, or any class of members of the public, to read it.

Section 17 Duty to file accounts and reports

(1) Sections 441 to 444 apply to LLPs, modified so that they read as follow—

Duty to file accounts and reports with the registrar

(441)

(1) The designated members of an LLP must deliver to the registrar for each financial year the accounts, auditor’s report, strategic report and energy and carbon report required by—

section 444 (filing obligations of LLPs subject to small LLPs regime),

section 445 (filing obligations of medium-sized LLPs ), or

section 446 (filing obligations of large LLPs ).

(2) This is subject to section 448A (dormant subsidiary LLPs exempt from obligation to file accounts).

Period allowed for filing accounts and reports

(442)

(1) This section specifies the period allowed for the designated members of an LLP to comply with their obligation under section 441 to deliver accounts , the auditor’s report , strategic report and the energy and carbon report for a financial year to the registrar. This is referred to in this Act as the “period for filing” those accounts and those reports .

(2) The period is nine months after the end of the relevant accounting reference period. This is subject to the following provisions of this section.

(3) If the relevant accounting reference period is the LLP's first and is a period of more than twelve months, the period is—

(a) nine months from the first anniversary of the incorporation of the LLP, or

(b) three months after the end of the accounting reference period,

whichever last expires.

(4) If the relevant accounting reference period is treated as shortened by virtue of a notice given by the LLP under section 392 (alteration of accounting reference date), the period is—

(a) that applicable in accordance with the above provisions, or

(b) three months from the date of the notice under that section,

whichever last expires.

(5) Subject to subsection (5A), if for any special reason the Secretary of State thinks fit he may, on an application made before the expiry of the period otherwise allowed, by notice in writing to an LLP extend that period by such further period as may be specified in the notice.

(5A) Any such extension must not have the effect of extending the period for filing to more than twelve months after the end of the relevant accounting reference period.

(6) In this section “ the relevant accounting reference period ” means the accounting reference period by reference to which the financial year for the accounts in question was determined.

Calculation of period allowed

(443)

(1) This section applies for the purposes of calculating the period for filing an LLP's accounts , auditor’s report , strategic report and energy and carbon report which is expressed as a specified number of months from a specified date or after the end of a specified previous period.

(2) Subject to the following provisions, the period ends with the date in the appropriate month corresponding to the specified date or the last day of the specified previous period.

(3) If the specified date, or the last day of the specified previous period, is the last day of a month, the period ends with the last day of the appropriate month (whether or not that is the corresponding date).

(4) If—

(a) the specified date, or the last day of the specified previous period, is not the last day of a month but is the 29th or 30th, and

(b) the appropriate month is February,

the period ends with the last day of February.

(5) “ The appropriate month ” means the month that is the specified number of months after the month in which the specified date, or the end of the specified previous period, falls.

Filing obligations of LLPs subject to small LLPs regime

(444)

(1) The designated members of an LLP subject to the small LLPs regime—

(a) must deliver to the registrar for each financial year a copy of the balance sheet drawn up as at the last day of that year, and

(b) may also deliver to the registrar a copy of the LLP's profit and loss account for that year.

(2) Where the designated members deliver to the registrar a copy of the LLP ’s profit and loss account under subsection (1)(b), the designated members must also deliver to the registrar a copy of the auditor's report on the accounts that they deliver. This does not apply if the LLP is exempt from audit and the members have taken advantage of that exemption.

(2A) Where the balance sheet or profit and loss account is abridged pursuant to paragraph 1A of Schedule 1 to the Small Limited Liability Partnerships (Accounts) Regulations 2008 ( S.I. 2008/1912 ), the designated members must also deliver to the registrar a statement by the LLP that all the members of the LLP have consented to the abridgement.

(3) The copies of accounts and auditors' reports delivered to the registrar must be copies of the LLP's annual accounts and auditor's report ....

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) Where the designated members of an LLP subject to the small LLPs regime ... do not deliver to the registrar a copy of the LLP's profit and loss account, the copy of the balance sheet delivered to the registrar must contain in a prominent position a statement that the LLP's annual accounts have been delivered in accordance with the provisions applicable to LLPs subject to the small LLPs regime.

(5A) Subject to subsection (5C), where the designated members of an LLP subject to the small LLPs regime do not deliver to the registrar a copy of the LLP ’s profit and loss account—

(a) the copy of the balance sheet delivered to the registrar must disclose that fact, and

(b) unless the LLP is exempt from audit and the members have taken advantage of that exemption, the notes to the balance sheet delivered must satisfy the requirements in subsection (5B).

(5B) Those requirements are that the notes to the balance sheet must—

(a) state whether the auditor’s report was qualified or unqualified,

(b) where that report was qualified, disclose the basis of the qualification (reproducing any statement under section 498(2)(a) or (b) or (3), if applicable),

(c) where that report was unqualified, include a reference to any matters to which the auditor drew attention by way of emphasis, and

(d) state—

(i) the name of the auditor and (where the auditor is a firm) the name of the person who signed the auditor’s report as senior statutory auditor, or

(ii) if the conditions in section 506 (circumstances in which names may be omitted) are met, that a determination has been made and notified to the Secretary of State in accordance with that section.

(5C) Subsection (5A) does not apply in relation to an LLP if—

(a) the LLP qualifies as a micro-entity (see sections 384A and 384B) in relation to a financial year, and

(b) the LLP ’s accounts are prepared for that year in accordance with any of the micro-entity provisions.

(6) The copy of the balance sheet delivered to the registrar under this section must state the name of the person who signed it on behalf of the members.

(7) The copy of the auditor's report delivered to the registrar under this section must—

(a) state the name of the auditor and (where the auditor is a firm) the name of the person who signed it as senior statutory auditor, or

(b) if the conditions in section 506 (circumstances in which names may be omitted) are met, state that a determination has been made and notified to the Secretary of State in accordance with that section.

(8) If more than one person is appointed as auditor, the references in subsections (5B)(d)(i) and (7)(a) to the name of the auditor are to be read as references to the names of all the auditors.

(2) Until section 1068 comes fully into force, for subsections (6) and (7) of section 444 as applied to LLPs by paragraph (1) substitute—

(6) The copy of the balance sheet delivered to the registrar under this section must—

(a) state the name of the person who signed it on behalf of the members under section 414, and

(b) be signed on behalf of the members by a designated member.

(7) The copy of the auditor's report delivered to the registrar under this section must—

(a) state the name of the auditor and (where the auditor is a firm) the name of the person who signed it as senior statutory auditor, and

(b) be signed by the auditor or (where the auditor is a firm) in the name of the firm by a person authorised to sign on its behalf,

or, if the conditions in section 506 (circumstances in which names may be omitted) are met, state that a determination has been made and notified to the Secretary of State in accordance with that section.

Section 18 Filing obligations of medium-sized LLPs

(1) Section 445 applies to LLPs, modified so that it reads as follows—

Filing obligations of medium-sized LLPs

(445)

(1) The designated members of an LLP that qualifies as a medium-sized LLP in relation to a financial year (see sections 465 to 467) must deliver a copy of the LLP's annual accounts to the registrar.

(2) They must also deliver to the registrar a copy of the auditor's report on those accounts. This does not apply if the LLP is exempt from audit and the members have taken advantage of that exemption.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) The copy of the balance sheet delivered to the registrar under this section must state the name of the person who signed it on behalf of the members.

(6) The copy of the auditor's report delivered to the registrar under this section must—

(a) state the name of the auditor and (where the auditor is a firm) the name of the person who signed it as senior statutory auditor, or

(b) if the conditions in section 506 (circumstances in which names may be omitted) are met, state that a determination has been made and notified to the Secretary of State in accordance with that section.

(6A) If more than one person is appointed as auditor, the reference in subsection (6)(a) to the name of the auditor is to be read as a reference to the names of all the auditors.

(7) This section does not apply to LLPs within section 444 (filing obligations of LLPs subject to the small LLPs regime).

(2) Until section 1068 comes fully into force, for subsections (5) and (6) of section 445 as applied to LLPs by paragraph (1) substitute—

(5) The copy of the balance sheet delivered to the registrar under this section must—

(a) state the name of the person who signed it on behalf of the members under section 414, and

(b) be signed on behalf of the members by a designated member.

(6) The copy of the auditor's report delivered to the registrar under this section must—

(a) state the name of the auditor and (where the auditor is a firm) the name of the person who signed it as senior statutory auditor, and

(b) be signed by the auditor or (where the auditor is a firm) in the name of the firm by a person authorised to sign on its behalf,

or, if the conditions in section 506 (circumstances in which names may be omitted) are met, state that a determination has been made and notified to the Secretary of State in accordance with that section.

Section 19 Filing obligations of large LLPs

(1) Section 446 applies to LLPs, modified so as to read as follows—

Filing obligations of large LLPs

(446)

(1) The designated members of an LLP that does not qualify as small or medium-sized must deliver to the registrar for each financial year of the LLP a copy of the LLP's annual accounts.

(2) The designated members must also deliver to the registrar a copy of the auditor's report on those accounts. This does not apply if the LLP is exempt from audit and the members have taken advantage of that exemption.

(2A) The designated members must also deliver to the registrar a copy of the energy and carbon report for each financial year of the LLP , unless the members of the LLP are, by virtue of sections 415(4) or 415A, not under a duty to prepare an energy and carbon report.

(2B) The designated members must also deliver to the registrar a copy of the strategic report for each financial year of the LLP if the members of the LLP are under a duty to prepare a strategic report by virtue of section 414A.

(3) The copy of the balance sheet delivered to the registrar under this section must state the name of the person who signed it on behalf of the members.

(4) The copy of the auditor's report delivered to the registrar under this section must—

(a) state the name of the auditor and (where the auditor is a firm) the name of the person who signed it as senior statutory auditor, or

(b) if the conditions in section 506 (circumstances in which names may be omitted) are met, state that a determination has been made and notified to the Secretary of State in accordance with that section.

(4A) If more than one person is appointed as auditor, the reference in subsection (4)(a) to the name of the auditor is to be read as a reference to the names of all the auditors.

(5) This section does not apply to LLPs within—

(a) section 444 (filing obligations of LLPs subject to the small LLPs regime), or

(b) section 445 (filing obligations of medium-sized LLPs).

(2) Until section 1068 comes fully into force, for subsections (3) and (4) of section 446 as applied to LLPs by paragraph (1) substitute—

(3) The copy of the balance sheet delivered to the registrar under this section must—

(a) state the name of the person who signed it on behalf of the members under section 414, and

(b) be signed on behalf of the members by a designated member.

(4) The copy of the auditor's report delivered to the registrar under this section must—

(a) state the name of the auditor and (where the auditor is a firm) the name of the person who signed it as senior statutory auditor, and

(b) be signed by the auditor or (where the auditor is a firm) in the name of the firm by a person authorised to sign on its behalf,

or, if the conditions in section 506 (circumstances in which names may be omitted) are met, state that a determination has been made and notified to the Secretary of State in accordance with that section.

Section 19A Exemption for dormant subsidiary LLPs

Section 448A applies to LLPs , modified so as to read as follows—

Dormant subsidiary LLPs exempt from obligation to file accounts

(448A)

(1) The designated members of an LLP are not required to deliver a copy of the LLP’s individual accounts to the registrar in respect of a financial year if—

(a) the LLP is a subsidiary undertaking,

(b) it has been dormant throughout the whole of that year, and

(c) its parent undertaking is established under laws of any part of the United Kingdom .

(2) Exemption is conditional upon compliance with all of the following conditions—

(a) all members of the LLP must agree to the exemption in respect of the financial year in question,

(b) the parent undertaking must give a guarantee under section 448C in respect of that year,

(c) the LLP must be included in the consolidated accounts drawn up for that year or to an earlier date in that year by the parent undertaking in accordance with—

(i) if the undertaking is a company, the requirements of this Part of this Act, or, if the undertaking is not a company, the legal requirements which apply to the drawing up of consolidated accounts for that undertaking, or

(ii) international accounting standards,

(d) the parent undertaking must disclose in the notes to the consolidated accounts that the designated members of the LLP are exempt from the requirement to deliver a copy of the LLP’s individual accounts to the registrar by virtue of this section,

(e) the designated members of the LLP must deliver to the registrar, within the period for filing the LLP’s accounts and auditor’s report for that year —

(i) a written notice of the agreement referred to in subsection (2)(a),

(ii) the statement referred to in section 448C(1),

(iii) a copy of the consolidated accounts referred to in subsection 2(c),

(iv) a copy of the auditor’s report on those accounts, and

(v) a copy of the consolidated annual report drawn up by the parent undertaking.

LLPs excluded from the dormant subsidiaries exemption

(448B) The designated members of an LLP are not entitled to the exemption conferred by section 448A (dormant subsidiaries) if the LLP was at any time within the financial year in question—

(za) a traded LLP,

(a) an LLP that—

(i) is an authorised insurance company, a banking LLP, an e-money issuer, a MiFID investment firm or a UCITS management company, or

(ii) carries on insurance market activity, or

(b) an employers’ association as defined in section 122 of the Trade Union and Labour Relations (Consolidation) Act 1992 (c 52) or Article 4 of the Industrial Relations (Northern Ireland) Order 1992 ( S.I. 1992/807) (NI 5) .

Dormant subsidiaries exemption: parent undertaking declaration of guarantee

(448C)

(1) A guarantee is given by a parent undertaking under this section when the designated members of the subsidiary LLP deliver to the registrar a statement by the parent undertaking that it guarantees the subsidiary LLP under this section.

(2) The statement under subsection (1) must be authenticated by the parent undertaking and must specify—

(a) the name of the parent undertaking,

(b) the registered number of the parent undertaking (if any),

(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d) the name and registered number of the subsidiary LLP in respect of which the guarantee is being given,

(e) the date of the statement, and

(f) the financial year to which the guarantee relates.

(3) A guarantee given under this section has the effect that—

(a) the parent undertaking guarantees all outstanding liabilities to which the subsidiary LLP is subject at the end of the financial year to which the guarantee relates, until they are satisfied in full, and

(b) the guarantee is enforceable against the parent undertaking by any person to whom the subsidiary LLP is liable in respect of those liabilities.

Section 20 Requirements where abbreviated accounts delivered

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 21 Approval and signing of abbreviated accounts

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 22 Failure to file accounts and reports

(1) Sections 451 to 453 apply to LLPs, modified so that they read as follow—

Default in filing accounts and reports : offences

(451)

(1) If the requirements of section 441 (duty to file accounts and reports with the registrar) are not complied with in relation to an LLP's accounts and reports for a financial year before the end of the period for filing those accounts and reports , every person who immediately before the end of that period was a designated member of the LLP commits an offence.

(2) It is a defence for a person charged with such an offence to prove that he took all reasonable steps for securing that those requirements would be complied with before the end of that period.

(3) It is not a defence to prove that the documents in question were not in fact prepared as required by this Part.

(4) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale.

Default in filing accounts and reports : court order

(452)

(1) If—

(a) the requirements of section 441 (duty to file accounts and reports with the registrar) are not complied with in relation to an LLP's accounts and reports for a financial year before the end of the period for filing those accounts and reports , and

(b) the designated members of the LLP fail to make good the default within 14 days after the service of a notice on them requiring compliance,

the court may, on the application of any member or creditor of the LLP or of the registrar, make an order directing the designated members (or any of them) to make good the default within such time as may be specified in the order.

(2) The court's order may provide that all costs (in Scotland, expenses) of and incidental to the application are to be borne by the members.

Civil penalty for failure to file accounts strategic report, , auditor’s report and energy and carbon report

(453)

(1) Where the requirements of section 441 are not complied with in relation to an LLP's accounts and reports for a financial year before the end of the period for filing those accounts and reports , the LLP is liable to a civil penalty. This is in addition to any liability of the designated members under section 451.

(2) Regulations 1(3) and 4(2) and (3) of the Companies (Late Filing Penalties) and Limited Liability Partnerships (Filing Periods and Late Filing Penalties) Regulations 2008 (S.I. 2008/497) apply to LLPs with the following modifications—

(a) references to a company or private company include references to an LLP;

(b) references to 6th April 2008 are to be read as references to 1st October 2008; and

(c) the second column of the table in regulation 4(2) (penalties for public companies) is omitted.

(3) The penalty may be recovered by the registrar and is to be paid into the Consolidated Fund.

(4) It is not a defence in proceedings under this section to prove that the documents in question were not in fact prepared as required by this Part.

(2) At the end of regulation 6(3) of the Companies (Late Filing Penalties) and Limited Liability Partnerships (Filing Periods and Late Filing Penalties) Regulations 2008 insert “, but paragraph (1) does not apply to accounts or reports for financial years beginning on or after 1st October 2008.”

Section 23 Revision of defective accounts , strategic report or energy and carbon report

Sections 454 to 456 apply to LLPs, modified so that they read as follows—

Voluntary revision of accounts etc

(454)

(1) If it appears to the members of an LLP that the LLP’s annual accounts , the LLP’s strategic report or the LLP’s energy and carbon report did not comply with the requirements of this Act, they may prepare revised accounts , a revised strategic report or a revised energy and carbon report.

(2) Where copies of the previous accounts , strategic report or energy and carbon report have been sent out to members or delivered to the registrar, the revisions must be confined to—

(a) the correction of those respects in which the previous accounts , strategic report or energy and carbon report did not comply with the requirements of this Act, and

(b) the making of any necessary consequential alterations.

(3) The Companies (Revision of Defective Accounts and Reports) Regulations 2008 (S.I. 2008/373) apply for the purposes of this section with the following modifications—

(a) references to a company include references to an LLP; ...

(b) references to a director or to an officer of a company include references to a member of an LLP;

(c) references to a directors’ report include references to an energy and carbon report;

(d) references to a revised directors’ report include references to revised energy and carbon report except for the purposes of regulation 7;

(e) references to the date on which the original directors’ report was approved by the board of directors include references to the date on which the original energy and carbon report was approved by the members of an LLP ;

(f) references to the date on which a revised directors’ report is approved by the board of directors include references to the date on which a revised energy and carbon report is approved by the members of an LLP ; and

(g) the reference in regulation 5 to section 419(3) and (4) includes a reference to section 419(2) and (3) as applied and modified by regulation 12B.

Secretary of State's notice in respect of accounts , strategic report or energy and carbon report

(455)

(1) This section applies where copies of an LLP's annual accounts , strategic report or energy and carbon report have been delivered to the registrar, and it appears to the Secretary of State that there is, or may be, a question whether the accounts or report comply with the requirements of this Act.

(2) The Secretary of State may give notice to the members of the LLP indicating the respects in which it appears that such a question arises or may arise.

(3) The notice must specify a period of not less than one month for the members to give an explanation of the accounts , strategic report or energy and carbon report or prepare revised accounts , a revised strategic report or a revised energy and carbon report .

(4) If at the end of the specified period, or such longer period as the Secretary of State may allow, it appears to the Secretary of State that the members have not—

(a) given a satisfactory explanation of the accounts or reports , or

(b) revised the accounts or reports so as to comply with the requirements of this Act,

the Secretary of State may apply to the court.

(5) The provisions of this section apply equally to revised annual accounts , revised strategic reports and revised energy and carbon reports , in which case they have effect as if the references to revised accounts or reports were references to further revised accounts or reports .

Application to court in respect of defective accounts , strategic report or energy and carbon report

(456)

(1) An application may be made to the court—

(a) by the Secretary of State, after having complied with section 455, or

(b) by the Financial Reporting Council Limited ,

for a declaration (in Scotland, a declarator) that the annual accounts of an LLP do not comply, a strategic report does not comply , or an energy and carbon report does not comply, with the requirements of this Act and for an order requiring the members of the LLP to prepare revised accounts or a revised report .

(2) Notice of the application, together with a general statement of the matters at issue in the proceedings, shall be given by the applicant to the registrar for registration.

(3) If the court orders the preparation of revised accounts, it may give directions as to—

(a) the auditing of the accounts, ...

(aa) the revision of any strategic report or energy and carbon report, and

(b) the taking of steps by the members to bring the making of the order to the notice of persons likely to rely on the previous accounts,

and such other matters as the court thinks fit.

(3A) If the court orders the preparation of a revised strategic report or revised energy and carbon report, it may give directions as to—

(a) the taking of steps by the members to bring the making of the order to the notice of persons likely to rely on the previous report, and

(b) such other matters as the court thinks fit.

(4) If the court finds that the accounts or report did not comply with the requirements of this Act it may order that all or part of—

(a) the costs (in Scotland, expenses) of and incidental to the application, and

(b) any reasonable expenses incurred by the LLP in connection with or in consequence of the preparation of revised accounts or a revised report ,

are to be borne by such of the members as were party to the approval of the defective accounts or report . For this purpose every member of the LLP at the time of the approval of the accounts or report shall be taken to have been a party to the approval unless he shows that he took all reasonable steps to prevent that approval.

(5) Where the court makes an order under subsection (4) it shall have regard to whether the members party to the approval of the defective accounts or report knew or ought to have known that the accounts or report did not comply with the requirements of this Act, and it may exclude one or more members from the order or order the payment of different amounts by different members.

(6) On the conclusion of proceedings on an application under this section, the applicant must send to the registrar for registration a copy of the court order or, as the case may be, give notice to the registrar that the application has failed or been withdrawn.

(7) The provisions of this section apply equally to revised annual accounts , revised strategic reports and revised energy and carbon reports , in which case they have effect as if the references to revised accounts or reports were references to further revised accounts or reports .

Section 24 Disclosure of information

Sections 458 to 461 apply to LLPs, modified so that they read as follows—

Disclosure of information by tax authorities

(458)

(1) The Commissioners for Her Majesty's Revenue and Customs may disclose information to the Financial Reporting Council Limited for the purpose of facilitating—

(a) the taking of steps by the Financial Reporting Council Limited to discover whether there are grounds for an application to the court under section 456 (application in respect of defective accounts, strategic report or energy and carbon report etc), or

(b) a decision by the Financial Reporting Council Limited whether to make such an application.

(2) This section applies despite any statutory or other restriction on the disclosure of information. Provided that, in the case of personal data within the meaning of the Data Protection Act 1998 (c.29), information is not to be disclosed in contravention of that Act.

(3) Information disclosed to the Financial Reporting Council Limited under this section—

(a) may not be used except in or in connection with—

(i) taking steps to discover whether there are grounds for an application to the court under section 456, or

(ii) deciding whether or not to make such an application,

or in, or in connection with, proceedings on such an application; and

(b) must not be further disclosed except—

(i) to the person to whom the information relates, or

(ii) in, or in connection with, proceedings on any such application to the court.

(4) A person who contravenes subsection (3) commits an offence unless—

(a) he did not know, and had no reason to suspect, that the information had been disclosed under this section, or

(b) he took all reasonable steps and exercised all due diligence to avoid the commission of the offence.

(5) A person guilty of an offence under subsection (4) is liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);

(b) on summary conviction—

(i) in England and Wales, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both);

(ii) in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum (or both).

(6) Where an offence under this section is committed by a body corporate, every officer of the body who is in default also commits the offence. For this purpose—

(a) any person who purports to act as director, manager or secretary of the body is treated as an officer of the body, and

(b) if the body is a company, any shadow director is treated as an officer of the company.

Power of the Financial Reporting Council Limited to require documents, information and explanations

(459)

(1) This section applies where it appears to the Financial Reporting Council Limited that there is, or may be, a question whether an LLP's annual accounts , strategic report or energy and carbon report comply with the requirements of this Act.

(2) The Financial Reporting Council Limited may require any of the persons mentioned in subsection (3) to produce any document, or to provide him with any information or explanations, that he may reasonably require for the purpose of—

(a) discovering whether there are grounds for an application to the court under section 456, or

(b) deciding whether to make such an application.

(3) Those persons are—

(a) the LLP;

(b) any member, employee, or auditor of the LLP;

(c) any persons who fell within paragraph (b) at a time to which the document or information required by the Financial Reporting Council Limited relates.

(4) If a person fails to comply with such a requirement, the Financial Reporting Council Limited may apply to the court.

(5) If it appears to the court that the person has failed to comply with a requirement under subsection (2), it may order the person to take such steps as it directs for securing that the documents are produced or the information or explanations are provided.

(6) A statement made by a person in response to a requirement under subsection (2) or an order under subsection (5) may not be used in evidence against him in any criminal proceedings.

(7) Nothing in this section compels any person to disclose documents or information in respect of which a claim to legal professional privilege (in Scotland, to confidentiality of communications) could be maintained in legal proceedings.

(8) In this section “ document ” includes information recorded in any form.

Restrictions on disclosure of information obtained under compulsory powers

(460)

(1) This section applies to information (in whatever form) obtained in pursuance of a requirement or order under section 459 (power of Financial Reporting Council Limited to require documents etc) that relates to the private affairs of an individual or to any particular business.

(2) No such information may, during the lifetime of that individual or so long as that business continues to be carried on, be disclosed without the consent of that individual or the person for the time being carrying on that business.

(3) This does not apply—

(a) to disclosure permitted by section 461 (permitted disclosure of information obtained under compulsory powers), or

(b) to the disclosure of information that is or has been available to the public from another source.

(4) A person who discloses information in contravention of this section commits an offence, unless—

(a) he did not know, and had no reason to suspect, that the information had been disclosed under section 459, or

(b) he took all reasonable steps and exercised all due diligence to avoid the commission of the offence.

(5) A person guilty of an offence under this section is liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);

(b) on summary conviction—

(i) in England and Wales, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both);

(ii) in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum (or both).

(6) Where an offence under this section is committed by a body corporate, every officer of the body who is in default also commits the offence. For this purpose—

(a) any person who purports to act as director, manager or secretary of the body is treated as an officer of the body, and

(b) if the body is a company, any shadow director is treated as an officer of the company.

Permitted disclosure of information obtained under compulsory powers

(461)

(1) The prohibition in section 460 of the disclosure of information obtained in pursuance of a requirement or order under section 459 (power of Financial Reporting Council Limited to require documents etc) that relates to the private affairs of an individual or to any particular business has effect subject to the following exceptions.

(2) It does not apply to the disclosure of information for the purpose of facilitating the carrying out by the Financial Reporting Council Limited of its functions under section 456.

(3) It does not apply to disclosure to—

(a) the Secretary of State,

(b) the Department of Enterprise, Trade and Investment for Northern Ireland,

(c) the Treasury,

(d) the Bank of England,

(e) Financial Conduct Authority,

(ea) Prudential Regulation Authority, or

(f) the Commissioners for Her Majesty's Revenue and Customs.

(4) It does not apply to disclosure—

(a) for the purpose of assisting the body known as the Professional Oversight Board established under the articles of association of the Financial Reporting Council Limited (registered number 02486368) to exercise its functions under Part 42 of this Act;

(b) with a view to the institution of, or otherwise for the purposes of, disciplinary proceedings relating to the performance by an accountant or auditor of his professional duties;

(c) for the purpose of enabling or assisting the Secretary of State or the Treasury to exercise any of their functions under any of the following—

(i) the Companies Acts,

(ii) Part 5 of the Criminal Justice Act 1993 (c.36) (insider dealing),

(iii) the Insolvency Act 1986 (c.45) or the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)),

(iv) the Company Directors Disqualification Act 1986 (c.46) or the Company Directors Disqualification (Northern Ireland) Order 2002 (S.I. 2002/3150 (N.I. 4)),

(v) the Financial Services and Markets Act 2000 (c.8);

(d) for the purpose of enabling or assisting the Department of Enterprise, Trade and Investment for Northern Ireland to exercise any powers conferred on it by the enactments relating to companies, directors' disqualification or insolvency;

(e) for the purpose of enabling or assisting the Bank of England to exercise its functions when acting otherwise than in its capacity as the Prudential Regulation Authority;

(f) for the purpose of enabling or assisting the Commissioners for Her Majesty's Revenue and Customs to exercise their functions;

(g) for the purpose of enabling or assisting the Financial Conduct Authority or the Prudential Regulation Authority to exercise its functions under any of the following—

(i) the legislation relating to friendly societies ...,

(ia) the legislation relating to a society, other than a society registered as a credit union, which is—

(aa) a registered society within the meaning given by section 1(1) of the Co-operative and Community Benefit Societies Act 2014, or

(ab) a society registered or deemed to be registered under the Industrial and Provident Societies Act (Northern Ireland) 1969,

(ii) the Building Societies Act 1986 (c.53),

(iii) Part 7 of the Companies Act 1989 (c.40),

(iv) the Financial Services and Markets Act 2000; or

(h) in pursuance of any assimilated obligation.

(5) It does not apply to disclosure to a body exercising functions of a public nature under legislation in any country or territory outside the United Kingdom that appear to the Financial Reporting Council Limited to be similar to its functions under section 456 for the purpose of enabling or assisting that body to exercise those functions.

(6) In determining whether to disclose information to a body in accordance with subsection (5), the Financial Reporting Council Limited must have regard to the following considerations—

(a) whether the use which the body is likely to make of the information is sufficiently important to justify making the disclosure;

(b) whether the body has adequate arrangements to prevent the information from being used or further disclosed other than—

(i) for the purposes of carrying out the functions mentioned in that subsection, or

(ii) for other purposes substantially similar to those for which information disclosed to the Financial Reporting Council Limited could be used or further disclosed.

(7) Nothing in this section authorises the making of a disclosure in contravention of the Data Protection Act 1998 (c.29).

Section 24A Accounting standards

Section 463 applies to LLPs, modified so that it reads as follows—

Liability for false or misleading statements in strategic report or energy and carbon report

(463)

(1) A member of an LLP is liable to compensate the LLP for any loss suffered by it as a result of—

(a) any untrue or misleading statement in a strategic report or energy and carbon report , or

(b) the omission from a strategic report or energy and carbon report of anything required to be included in it.

(2) The member is so liable only if—

(a) the member knew the statement to be untrue or misleading or was reckless as to whether it was untrue or misleading, or

(b) the member knew the omission to be dishonest concealment of a material fact.

(3) No person shall be subject to any liability to a person other than the LLP resulting from reliance, by that person or another, on information in a report to which this section applies.

(4) The reference in subsection (3) to a person being subject to a liability includes a reference to another person being entitled as against him to be granted any civil remedy or to rescind or repudiate an agreement.

(5) This section does not affect—

(a) liability for a civil penalty, or

(b) liability for a criminal offence.

Section 25 Accounting standards

Section 464 applies to LLPs, modified so that it reads as follows—

Accounting standards

(464)

(1) In this Part “ accounting standards ” means statements of standard accounting practice issued by the Financial Reporting Council Limited.

(2) References in this Part to accounting standards applicable to an LLP 's annual accounts are to such standards as are, in accordance with their terms, relevant to the LLP 's circumstances and to the accounts

Section 26 Medium-sized LLPs

Sections 465 to 467 apply to LLPs, modified so that they read as follows—

LLPs qualifying as medium-sized: general

(465)

(1) An LLP qualifies as medium-sized in relation to its first financial year if the qualifying conditions are met in that year.

(2) An LLP qualifies as medium-sized in relation to a subsequent financial year—

(a) if the qualifying conditions are met in that year and the preceding financial year;

(b) if the qualifying conditions are met in that year and the LLP qualified as medium-sized in relation to the preceding financial year;

(c) if the qualifying conditions were met in the preceding financial year and the LLP qualified as medium-sized in relation to that year.

(3) The qualifying conditions are met by an LLP in a year in which it satisfies two or more of the following requirements—

(4) For a period that is an LLP's financial year but not in fact a year the maximum figures for turnover must be proportionately adjusted.

(5) The balance sheet total means the aggregate of the amounts shown as assets in the LLP's balance sheet.

(6) The number of employees means the average number of persons employed by the LLP in the year, determined as follows—

(a) find for each month in the financial year the number of persons employed under contracts of service by the LLP in that month (whether throughout the month or not),

(b) add together the monthly totals, and

(c) divide by the number of months in the financial year.

(7) This section is subject to section 466 (LLPs qualifying as medium-sized: parent LLPs).

LLPs qualifying as medium-sized: parent LLPs

(466)

(1) A parent LLP qualifies as a medium-sized LLP in relation to a financial year only if the group headed by it qualifies as a medium-sized group.

(2) A group qualifies as medium-sized in relation to the parent LLP's first financial year if the qualifying conditions are met in that year.

(3) A group qualifies as medium-sized in relation to a subsequent financial year of the parent LLP—

(a) if the qualifying conditions are met in that year and the preceding financial year;

(b) if the qualifying conditions are met in that year and the group qualified as medium-sized in relation to the preceding financial year;

(c) if the qualifying conditions were met in the preceding financial year and the group qualified as medium-sized in relation to that year.

(4) The qualifying conditions are met by a group in a year in which it satisfies two or more of the following requirements—

(5) The aggregate figures are ascertained by aggregating the relevant figures determined in accordance with section 465 for each member of the group.

(6) In relation to the aggregate figures for turnover and balance sheet total—

“ net ” means after any set-offs and other adjustments made to eliminate group transactions—

in the case of non-IAS accounts, in accordance with Schedule 3 to the Large and Medium-sized Limited Liability Partnerships (Accounts) Regulations 2008 (S.I. 2008/1913),

in the case of IAS accounts, in accordance with UK-adopted international accounting standards ; and

“ gross ” means without those set-offs and other adjustments.

An LLP may satisfy any relevant requirement on the basis of either the net or the gross figure.

(7) The figures for each subsidiary undertaking shall be those included in its individual accounts for the relevant financial year, that is—

(a) if its financial year ends with that of the parent LLP, that financial year, and

(b) if not, its financial year ending last before the end of the financial year of the parent LLP.

If those figures cannot be obtained without disproportionate expense or undue delay, the latest available figures shall be taken.

LLPs excluded from being treated as medium-sized

(467)

(1) An LLP is not entitled to take advantage of any of the provisions of this Part relating to LLPs qualifying as medium-sized if it was at any time within the financial year in question—

(a) a traded LLP,

(b) an LLP that—

(i) has permission under Part 4 of the Financial Services and Markets Act 2000 (c.8) to carry on a regulated activity, or

(ii) carries on insurance market activity,

(iii) is a scheme funder of a Master Trust scheme within the meanings given by section 39(1) of the Pension Schemes Act 2017 or section 39(1) of the Pension Schemes Act (Northern Ireland) 2021 (interpretation of Part 1),

(ba) an e-money issuer, or

(c) a member of an ineligible group.

(2) A group is ineligible if any of its members is—

(a) a traded company,

(b) a body corporate (other than a company) whose shares are admitted to trading on a UK regulated market,

(c) a person (other than a small company or small LLP) who has permission under Part 4 of the Financial Services and Markets Act 2000 to carry on a regulated activity,

(ca) an e-money issuer,

(d) a small company or small LLP that is an authorised insurance company, a banking company or banking LLP, ... a MiFID investment firm or a UCITS management company, or

(e) a person who carries on insurance market activity, or

(f) a scheme funder of a Master Trust scheme within the meanings given by section 39(1) of the Pension Schemes Act 2017 or section 39(1) of the Pension Schemes Act (Northern Ireland) 2021 (interpretation of Part 1).

(3) An LLP is a small LLP for the purposes of subsection (2) if it qualified as small in relation to its last financial year ending on or before the end of the financial year in question.

Section 27 General power to make further provision about accounts

Section 468 applies to LLPs, modified so that it reads as follows—

General power to make further provision about accounts

(468)

(1) The Secretary of State may make provision by regulations about—

(a) the accounts that LLPs are required to prepare;

(b) the categories of LLPs required to prepare accounts of any description;

(c) the form and content of the accounts that LLPs are required to prepare;

(d) the obligations of LLPs and others as regards—

(i) the approval of accounts,

(ii) the sending of accounts to members and others,

(iii) the delivery of copies of accounts to the registrar, and

(iv) the publication of accounts.

(2) The regulations may amend this Part by adding, altering or repealing provisions.

(3) But they must not amend (other than consequentially)—

(a) section 393 (accounts to give true and fair view), or

(b) the provisions of Chapter 11 (revision of defective accounts and reports).

(4) The regulations may create criminal offences in cases corresponding to those in which an offence is created by an existing provision of this Part. The maximum penalty for any such offence may not be greater than is provided in relation to an offence under the existing provision.

(5) The regulations may provide for civil penalties in circumstances corresponding to those within section 453(1) (civil penalty for failure to file accounts and reports). The provisions of section 453(3) and (4) apply in relation to any such penalty.

Section 28 Other supplementary provisions

Section 469 applies to LLPs, modified so that it reads as follows—

Preparation and filing of accounts in euros

(469)

(1) The amounts set out in the annual accounts of an LLP may also be shown in the same accounts translated into euros.

(2) When complying with section 441 (duty to file accounts and auditor's report), the designated members of an LLP may deliver to the registrar an additional copy of the LLP's annual accounts in which the amounts have been translated into euros.

(3) In both cases—

(a) the amounts must have been translated at the exchange rate prevailing on the date to which the balance sheet is made up, and

(b) that rate must be disclosed in the notes to the accounts.

(3A) Subsection (3)(b) does not apply to the non-IAS individual accounts of an LLP for a financial year in which the LLP qualifies as a micro-entity (see sections 384A and 384B).

(4) For the purposes of sections 434 and 435 (requirements in connection with published accounts) any additional copy of the LLP's annual accounts delivered to the registrar under subsection (2) above shall be treated as statutory accounts of the LLP. In the case of such a copy, references in those sections to the auditor's report on the LLP's annual accounts shall be read as references to the auditor's report on the annual accounts of which it is a copy.

Section 29 Meaning of “annual accounts”

Section 471 applies to LLPs, modified so that it reads as follows—

Meaning of “annual accounts” and related expressions

(471)

(1) In this Part an LLP's “ annual accounts ”, in relation to a financial year, means—

(a) any individual accounts prepared by the LLP for that year (see section 394), and

(b) any group accounts prepared by the LLP for that year (see section 399).

This is subject to section 408 (option to omit individual profit and loss account from annual accounts where information given in notes to the individual balance sheet ).

(2) In this Part an LLP’s “annual accounts and reports” for a financial year are—

(a) its annual accounts,

(b) the strategic report (if any),

(c) the energy and carbon report (if any),

(d) the auditor’s report on those accounts and the strategic report (where this is covered by the auditor’s report), unless the LLP is exempt from audit.

Section 30 Notes to the accounts

Section 472 applies to LLPs, modified so that it reads as follows—

Notes to the accounts

(472)

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1A) In the case of an LLP which qualifies as a micro-entity in relation to a financial year (see sections 384A and 384B), the notes to the accounts for that year required by regulation 5A of, and paragraph 55 of Part 3 of Schedule 1 to, the Small Limited Liability Partnerships (Accounts) Regulations 2008 (S.I. 2008/1912) must be included at the foot of the balance sheet.

(2) References in this Part to an LLP's annual accounts, or to a balance sheet or profit and loss account, include notes to the accounts giving information which is required by any provision of this Act or UK-adopted international accounting standards , and required or allowed by any such provision to be given in a note to LLP accounts.

Section 31 Parliamentary procedure for regulations under section 468

Section 473 applies to LLPs, modified so that it reads as follows—

Parliamentary procedure for regulations under section 468

(473)

(1) This section applies to regulations under section 468 (general power to make further provision about accounts).

(2) Any such regulations may make consequential amendments or repeals in other provisions of this Act, or in other enactments.

(3) Regulations that—

(a) restrict the classes of LLP which have the benefit of any exemption, exception or special provision,

(b) require additional matter to be included in a document of any class, or

(c) otherwise render the requirements of this Part more onerous,

are subject to affirmative resolution procedure.

(4) Otherwise, the regulations are subject to negative resolution procedure.

Section 32 Minor definitions

Section 474 applies to LLPs, modified so that it reads as follows—

Minor definitions

(474)

(1) In this Part—

“ authorised insurance company ” means a person (whether incorporated or not) who has permission under Part 4 of the Financial Services and Markets Act 2000 (c.8) to effect or carry out contracts of insurance, but does not include a friendly society within the meaning of the Friendly Societies Act 1992 (c.40);

“ banking company ” means a person who has permission under Part 4 of the Financial Services and Markets Act 2000 to accept deposits, other than—

a person who is not a company, and

a person who has such permission only for the purpose of carrying on another regulated activity in accordance with permission under that Part;

“ banking LLP ” means an LLP which has permission under Part 4 of the Financial Services and Markets Act 2000 to accept deposits (but does not include such an LLP which has permission to accept deposits only for the purpose of carrying on another regulated activity in accordance with that permission);

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

“ e-money issuer ” means a person who is registered as an authorised electronic money institution or a small electronic money institution within the meaning of the Electronic Money Regulations 2011 or who has permission under Part 4 of the Financial Services and Markets Act 2000 to carry on the activity of issuing electronic money within the meaning of article 9B of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544);

“ Financial Reporting Review Panel ” means the body known as the Financial Reporting Review Panel established under the articles of association of the Financial Reporting Council Limited (registered number 02486368);

“ group ” means a parent undertaking and its subsidiary undertakings;

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

“ included in the consolidation ”, in relation to group accounts, or “included in consolidated group accounts”, means that the undertaking is included in the accounts by the method of full (and not proportional) consolidation, and references to an undertaking excluded from consolidation shall be construed accordingly;

“ insurance company ” means—

an authorised insurance company, or

any other person (whether incorporated or not) who—

carries on insurance market activity (within the meaning of section 316(3) of the Financial Services and Markets Act 2000), or

may effect or carry out contracts of insurance under which the benefits provided by that person are exclusively or primarily benefits in kind in the event of accident to or breakdown of a vehicle,

but does not include a friendly society within the meaning of the Friendly Societies Act 1992;

“ international accounting standards ” means the international accounting standards, within the meaning of Article 2 of Regulation (EC) No. 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards ;

“ LLP ” means a limited liability partnership registered under the Limited Liability Partnerships Act 2000 ;

“micro-entity minimum accounting item” means an item of information required by this Part or by the Small Limited Liability Partnerships (Accounts) Regulations 2008 ( S.I. 2008/1912 ) to be contained in the non-IAS individual accounts of an LLP for a financial year in relation to which it qualifies as a micro-entity (see sections 384A and 384B);

“micro-entity provisions” means any provisions of this Part, Part 16 or the Small Limited Liability Partnerships (Accounts) Regulations 2008 ( S.I. 2008/1912 ) relating specifically to the individual accounts of an LLP which qualifies as a micro-entity;

“ MiFID investment firm ” means an investment firm within the meaning of Article 2.1A of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments other than—

an LLP which is exempted from the definition of “investment firm” by Schedule 3 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001,

an LLP which is an exempt investment firm within the meaning of regulation 4A(3) of the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), and

any other LLP which fulfils all the requirements set out in regulation 4C(3) of those Regulations;

“ profit and loss account ”, in relation to an LLP that prepares IAS accounts, includes an income statement or other equivalent financial statement required to be prepared by UK-adopted international accounting standards ;

“qualified”, in relation to an auditor’s report, means that the report does not state the auditor’s unqualified opinion that the accounts have been properly prepared in accordance with this Act;

“ regulated activity ” has the meaning given in section 22 of the Financial Services and Markets Act 2000, except that it does not include activities of the kind specified in any of the following provisions of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544)—

article 25A (arranging regulated mortgage contracts),

article 25B (arranging regulated home reversion plans),

article 25C (arranging regulated home purchase plans),

article 39A (assisting administration and performance of a contract of insurance),

article 53A (advising on regulated mortgage contracts),

article 53B (advising on regulated home reversion plans),

article 53C (advising on regulated home purchase plans),

article 21 (dealing as agent), article 25 (arranging deals in investments) or article 53 (advising on investments) where the activity concerns relevant investments that are not contractually based investments (within the meaning of article 3 of that Order), or

article 64 (agreeing to carry on a regulated activity of the kind mentioned in paragraphs (a) to (h));

“traded company” means a company any of whose transferable securities are admitted to trading on a UK regulated market ;

“traded LLP ” means an LLP any of whose transferable securities are admitted to trading on a UK regulated market ;

“ turnover ”, in relation to an LLP, means the amounts derived from the provision of goods and services ..., after deduction of—

trade discounts,

value added tax, and

any other taxes based on the amounts so derived;

“ UCITS management company” has the meaning given by the Glossary to the Handbook made by the Financial Conduct Authority under the Financial Services and Markets Act 2000;

“ UK-adopted international accounting standards ” means the international accounting standards which are adopted for use within the United Kingdom by virtue of the International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019.

“ wholly-owned subsidiary ” has the meaning given in section 1159(2) of this Act.

(2) In subsection (1)—

(a) the definitions of “banking company” and “banking LLP”, and

(b) references in the definition of “insurance company” to contracts of insurance and to the effecting or carrying out of such contracts,

must be read with—

section 22 of the Financial Services and Markets Act 2000,

the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544), and

Schedule 2 to that Act.

Section 33 Requirement for audited accounts

Section 475 applies to LLPs, modified so that it reads as follows—

Requirement for audited accounts

(475)

(1) An LLP's annual accounts for a financial year must be audited in accordance with this Part unless the LLP is exempt from audit under—

(a) section 477 (small LLPs),

(aa) section 479A (subsidiary LLPs ) , or

(b) section 480 (dormant LLPs).

(2) An LLP is not entitled to any such exemption unless its balance sheet contains a statement by the members to that effect.

(3) An LLP is not entitled to exemption under any of the provisions mentioned in subsection (1)(a) unless its balance sheet contains a statement by the members to the effect that the members acknowledge their responsibilities for complying with the requirements of this Act with respect to accounting records and the preparation of accounts.

(4) The statement required by subsection (2) or (3) must appear on the balance sheet above the signature required by section 414.

Section 34 Exemption from audit: small LLPs

Sections 477 to 479 apply to LLPs, modified so that they read as follows—

Small LLPs: conditions for exemption from audit

(477)

(1) An LLP that qualifies as a small LLP in relation to a financial year is exempt from the requirements of this Act relating to the audit of accounts for that year.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) For the purposes of this section—

(a) whether an LLP qualifies as a small LLP shall be determined in accordance with section 382(1) to (6), ...

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) This section has effect subject to—

section 475(2) and (3) (requirements as to statements to be contained in balance sheet),

section 478 (LLPs excluded from small LLPs exemption), and

section 479 (availability of small LLPs exemption in case of group LLP).

LLPs excluded from small LLPs exemption

(478) An LLP is not entitled to the exemption conferred by section 477 (small LLPs) if it was at any time within the financial year in question—

(a) an LLP whose securities are admitted to trading on a UK regulated market ,

(b) an LLP that—

(i) is an authorised insurance company, a banking LLP, an e-money issuer, a MiFID investment firm or a UCITS management company, or

(ii) carries on insurance market activity, or

(iii) is a scheme funder of a Master Trust scheme within the meanings given by section 39(1) of the Pension Schemes Act 2017 or section 39(1) of the Pension Schemes Act (Northern Ireland) 2021 (interpretation of Part 1) or

(c) an employers' association as defined in section 122 of the Trade Union and Labour Relations (Consolidation) Act 1992 (c.52) or Article 4 of the Industrial Relations (Northern Ireland) Order 1992 (S.I. 1992/807 (N.I. 5)).

Availability of small LLPs exemption in case of group LLP

(479)

(1) An LLP is not entitled to the exemption conferred by section 477 (small LLPs) in respect of a financial year during any part of which it was a group LLP unless—

(a) the group—

(i) qualifies as a small group in relation to that financial year, and

(ii) was not at any time in that year an ineligible group, or

(b) subsection (3) applies.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) An LLP is not excluded by subsection (1) if, throughout the whole of the period or periods during the financial year when it was a group LLP, it was both a subsidiary undertaking and dormant.

(4) In this section—

(a) “ group LLP ” means an LLP that is a parent LLP or a subsidiary undertaking, and

(b) “ the group ”, in relation to a group LLP, means that LLP together with all its associated undertakings.

For this purpose undertakings are associated if one is a subsidiary undertaking of the other or both are subsidiary undertakings of a third undertaking.

(5) For the purposes of this section—

(a) whether a group qualifies as small shall be determined in accordance with section 383 (LLPs qualifying as small: parent LLPs);

(b) “ ineligible group ” has the meaning given by section 384(2) and (3);

(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) The provisions mentioned in subsection (5) apply for the purposes of this section as if all the bodies corporate in the group were LLPs or companies.

Section 34A Exemption from audit: qualifying subsidiaries

Sections 479A, 479B and 479C apply to LLPs , modified so that they read as follows—

Subsidiary LLPs: conditions for exemption from audit

(479A)

(1) An LLP is exempt from the requirements of this Act relating to the audit of individual accounts for a financial year if—

(a) it is itself a subsidiary undertaking, and

(b) its parent undertaking is established under the law of any part of the United Kingdom .

(2) Exemption is conditional upon compliance with all of the following conditions—

(a) all members of the LLP must agree to the exemption in respect of the financial year in question,

(b) the parent undertaking must give a guarantee under section 479C in respect of that year,

(c) the LLP must be included in the consolidated accounts drawn up for that year or to an earlier date in that year by the parent undertaking in accordance with—

(i) if the undertaking is a company, the requirements of Part 15 of this Act, or, if the undertaking is not a company, the legal requirements which apply to the drawing up of consolidated accounts for that undertaking, or

(ii) UK-adopted international accounting standards (within the meaning given by section 474(1)) ,

(d) the parent undertaking must disclose in the notes to the consolidated accounts that the LLP is exempt from the requirements of this Act relating to the audit of individual accounts by virtue of this section,

(e) the designated members of the LLP must deliver to the registrar on or before the date that they file the LLP’s accounts for that year—

(i) a written notice of the agreement referred to in subsection (2)(a),

(ii) the statement referred to in section 479C(1),

(iii) a copy of the consolidated accounts referred to in subsection 2(c),

(iv) a copy of the consolidated annual report drawn up by the parent undertaking, and

(v) a copy of the auditor’s report on those accounts.

(3) This section has effect subject to—

section 475(2) and (3) (requirements as to statements contained in balance sheet).

LLPs excluded from the subsidiary LLPs audit exemption

(479B) An LLP is not entitled to the exemption conferred by section 479A (subsidiary LLPs ) if it was at any time within the financial year in question—

(za) a traded LLP as defined in section 474(1),

(a) an LLP that—

(i) is an authorised insurance company, a banking LLP, an e-money issuer, a MiFID investment firm or a UCITS management company, or

(ii) carries on insurance market activity, or

(iii) is a scheme funder of a Master Trust scheme within the meanings given by section 39(1) of the Pension Schemes Act 2017 or section 39(1) of the Pension Schemes Act (Northern Ireland) 2021 (interpretation of Part 1), or

(b) an employers’ association as defined in section 122 of the Trade Union and Labour Relations (Consolidation) Act 1992 (c 52) or Article 4 of the Industrial Relations (Northern Ireland) Order 1992 (S.I. 1992/807) (NI 5).

Parent undertaking declaration of guarantee of subsidiary’s liabilities

(479C)

(1) A guarantee is given by a parent undertaking under this section when the designated members of the subsidiary LLP deliver to the registrar a statement by the parent undertaking that it guarantees the subsidiary LLP under this section.

(2) The statement under subsection (1) must be authenticated by the parent undertaking and must specify—

(a) the name of the parent undertaking,

(b) the registered number (if any) of the parent undertaking,

(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d) the name and registered number of the subsidiary LLP in respect of which the guarantee is being given,

(e) the date of the statement, and

(f) the financial year to which the guarantee relates.

(3) A guarantee given under this section has the effect that—

(a) the parent undertaking guarantees all outstanding liabilities to which the subsidiary LLP is subject at the end of the financial year to which the guarantee relates, until they are satisfied in full, and

(b) the guarantee is enforceable against the parent undertaking by any person to whom the subsidiary LLP is liable in respect of those liabilities

Section 35 Exemption from audit: dormant LLPs

Sections 480 and 481 apply to LLPs, modified so that they read as follows—

Dormant LLPS: conditions for exemption from audit

(480)

(1) An LLP is exempt from the requirements of this Act relating to the audit of accounts in respect of a financial year if—

(a) it has been dormant since its formation, or

(b) it has been dormant since the end of the previous financial year and the following conditions are met.

(2) The conditions are that the LLP—

(a) as regards its individual accounts for the financial year in question—

(i) is entitled to prepare accounts in accordance with the small LLPs regime (see sections 381 to 384), or

(ii) would be so entitled but for having been a member of an ineligible group, and

(b) is not required to prepare group accounts for that year.

(3) This section has effect subject to—

section 475(2) and (3) (requirements as to statements to be contained in balance sheet), and

section 481 (LLPs excluded from dormant LLPs exemption).

LLPs excluded from dormant LLPs exemption

(481) An LLP is not entitled to the exemption conferred by section 480 (dormant LLPs) if it was at any time within the financial year in question an LLP that—

(za) is a traded LLP as defined in section 474(1),

(a) is an authorised insurance company, a banking LLP, an e-money issuer, a MiFID investment firm or a UCITS management company, or

(b) carries on insurance market activity.

Section 36 Appointment of auditors

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 reports for the previous financial year (see section 423), or

(b) if earlier, the day on which copies of the LLP's annual accounts and reports 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 or section 486A (default power of Secretary of State).

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

Appointment of auditors: additional requirements for public interest entities with audit committees

(485A)

(1) This section applies to the appointment under section 485(4) of an auditor or auditors of an LLP—

(a) which is also a public interest entity; and

(b) which has an audit committee.

(2) But it does not apply to the appointment of an Auditor General as auditor or one of the auditors of the LLP.

(3) Before an appointment to which this section applies is made—

(a) the audit committee of the LLP must make a recommendation to the designated members in connection with the appointment, and

(b) the designated members must propose an auditor or auditors for appointment.

(4) Before the audit committee makes a recommendation or the designated members make a proposal under subsection (3), the committee must carry out a selection procedure in accordance with Article 16(3) of the Audit Regulation.

(5) The audit committee must in its recommendation—

(a) identify its first and second choice candidates for appointment, drawn from those auditors who have participated in a selection procedure under subsection (4),

(b) give reasons for the choices so identified,

(c) state that—

(i) the recommendation is free from influence by a third party, and

(ii) no contractual term of the kind mentioned in Article 16(6) of the Audit Regulation has been imposed on the LLP.

(6) The designated members must include in their proposal—

(a) the recommendation made by the audit committee in connection with the appointment, and

(b) if the proposal of the designated members departs from the preference of the audit committee——

(i) a recommendation for a candidate or candidates for appointment drawn from those auditors who have participated in a selection procedure under subsection (4), and

(ii) the reasons for not following the audit committee’s recommendation.

(7) Where the audit committee recommends re-appointment of the LLP’s existing auditor or auditors, and the designated members are in agreement, subsections (4) and (5)(a) and (b) do not apply.

Appointment of auditors: additional requirements for public interest entities without audit committees

(485B)

(1) This section applies to the appointment under section 485(4) of an auditor or auditors of an LLP—

(a) which is also a public interest entity; and

(b) which does not have an audit committee.

(2) But it does not apply to the appointment of an Auditor General as auditor or one of the auditors of the LLP.

(3) Before an appointment to which this section applies is made the designated members must propose an auditor or auditors for appointment.

(4) Before the designated members make a proposal under subsection (3), they must carry out a selection procedure in accordance with Article 16(3) of the Audit Regulation, from which their proposed auditor or auditors must be drawn.

(5) Subsection (4) does not apply in relation to a proposal to re-appoint the LLP’s existing auditor or auditors.

Restriction on appointment of auditor of LLP which is a public interest entity

(485C)

(1) A person who has been, or will have been, auditor of an LLP which is a public interest entity for every financial year comprised in the maximum engagement period (see section 494ZA) may not be appointed as auditor of the LLP for any financial year which begins within the period of 4 years beginning with the day after the last day of the last financial year of the maximum engagement period.

(2) A person who is a member of the same network as the auditor mentioned in subsection (1) may not be appointed as auditor of the LLP for any financial year which begins within the period of 4 years mentioned in that subsection.

(3) This section does not apply in relation to an Auditor General.

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.

Defective appointments: default power of Secretary of State

(486A)

(1) If—

(a) an LLP appoints, or purports to appoint, an auditor or auditors, and

(b) the appointment or purported appointment is made in breach of section 485A, 485B or 485C (requirements applying to appointment of auditors by public interest entities),

the Secretary of State may appoint another auditor or auditors in place of the auditor or auditors referred to in paragraph (a).

(2) The breach of section 485A, 485B or 485C does not invalidate any report made under Chapter 3 of this Part by the auditor or auditors on the LLP’s annual reports or accounts before the auditor or auditors are replaced under subsection (1) of this section.

(3) But where the breach in question is a breach of section 485C, sections 1248 and 1249 (Secretary of State’s power to require second audit for companies) apply as if—

(a) the LLP was a company;

(b) the auditor was not an appropriate person, or the auditors were not appropriate persons, for the period during which the audit was conducted.

(4) Within one week of becoming aware of the breach of section 485A, 485B or 485C, the LLP must give notice to the Secretary of State that the power under subsection (1) of this section has become exercisable.

(5) If the LLP fails to give the notice required by subsection (4), an offence is committed by—

(a) the LLP, and

(b) every member of the LLP who is in default.

(6) 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 , or

(e) the auditor’s appointment would be in breach of section 485C.

(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.

Section 37 Fixing of auditor remuneration

Section 492 applies to LLPs, modified so that it reads as follows—

Fixing of auditor's remuneration

(492)

(1) The remuneration of an auditor appointed by the LLP must be fixed by the designated members or in such manner as the members of the LLP may determine.

(2) The remuneration of an auditor appointed by the Secretary of State must be fixed by the Secretary of State.

(3) For the purposes of this section “ remuneration ” includes sums paid in respect of expenses.

(4) This section applies in relation to benefits in kind as to payments of money.

Section 38 Disclosure of auditor remuneration

Section 494 applies to LLPs, modified so that it reads as follows—

Disclosure of services provided by auditor or associates and related remuneration

(494) Parts 1 and 2 of the Companies (Disclosure of Auditor Remuneration and Liability Limitation Agreements) Regulations 2008 (S.I. 2008/489) apply to LLPs with the following modifications—

(a) in regulation 3(1), omit the definition of “principal terms”;

(b) references to 6th April 2008 are to be read as references to 1st October 2008;

(c) references to a company include references to an LLP; and

(d) except in paragraph 3 of Schedule 1, references to a director or to an officer of a company include references to a member of an LLP.

Section 38A The maximum engagement period

Section 494ZA applies to LLPs, modified so that it reads as follows—

(494ZA)

(1) Where a person is auditor of an LLP for consecutive financial years, the maximum engagement period of the person as auditor of the LLP—

(a) begins with the first of those years (see the appropriate entry in the first column of the following Table), and

(b) ends with the financial year specified in the corresponding entry in the second column of the Table:

A financial year of the LLP beginning—

(a) on or after 17 June 1994, and

(b) before 17 June 2003.

A financial year of the LLP beginning—

(a) on or after 17 June 2003, and

(b) before 17 June 2016.

No qualifying selection procedure

Where neither the first financial year of the maximum engagement period nor any subsequent financial year is one for which the auditor has been appointed following the carrying out of a qualifying selection procedure, the later of—

(a) the last financial year of the LLP to begin before 17 June 2016, and

(b) the last financial year of the LLP to begin within the period of 10 years beginning with the first day of the first financial year of the maximum engagement period.

No qualifying selection procedure within 10 years

Where the last day of the last financial year of the LLP to begin within the period of 10 years beginning with the first day of the last financial year of the LLP for which the auditor was appointed following a qualifying selection procedure is before 17 June 2016—

(a) the last financial year of the LLP to begin before 17 June 2016, unless

(b) the auditor is appointed following a qualifying selection procedure for the first financial year of the LLP to begin on or after 17 June 2016, in which case it is the last financial year of the LLP to begin within the period of 20 years beginning with the first day of the first financial year of the maximum engagement period.

Qualifying selection procedure within 10 years

In any other case, the earlier of—

(a) the last financial year of the LLP to begin within the period of 10 years beginning with the first day of the last financial year of the LLP for which the auditor was appointed following a qualifying selection procedure, and

(b) the last financial year of the LLP to begin within the period of 20 years beginning with the first day of the first financial year of the maximum engagement period.

The earlier of—

(a) the last financial year of the LLP to begin within the period of 10 years beginning with the first day of the last financial year of the LLP for which the auditor was appointed following a qualifying selection procedure, and

(b) the last financial year of the LLP to begin within the period of 20 years beginning with the first day of the first financial year of the maximum engagement period.

(2) Where the first financial year of the maximum engagement period begins on or after 17 June 2003, the maximum engagement period may be extended by a period of no more than 2 years with the approval of the competent authority.

(3) Such approval may be given by the competent authority only if it is satisfied that exceptional circumstances exist.

(4) Where the competent authority gives its approval as mentioned in subsection (2)—

(a) the second column of the Table in subsection (1) has effect with the necessary modifications, and

(b) the first appointment to be made after the end of the period as so extended must be made following a qualifying selection procedure.

(5) In this section “qualifying selection procedure” means—

(a) in the case of an appointment for a financial year beginning on or after 17 June 2016 made after the Statutory Auditors and Third Country Auditors Regulations 2017 come into force—

(i) if the LLP has an audit committee, a selection procedure that complies with the requirements of section 485A(4) and (5)(a) and (b), and

(ii) if the LLP does not have an audit committee, a selection procedure that complies with the requirements of section 485B(4) ;

(b) in any other case, a selection procedure that substantially meets the requirements of Article 16(2) to (5) of the Audit Regulation as it had effect immediately before IP completion day , having regard to the circumstances at the time (including whether the LLP had an audit committee).

Section 38B Interpretation

Section 494A applies to LLPs, modified so that it reads as follows—

Interpretation

(494A) In this Chapter—

audit committee ” means a body which performs—

the functions referred to in—

rule 7.1.3 of the Disclosure Guidance and Transparency Rules sourcebook made by the Financial Conduct Authority (audit committees and their functions) under the Financial Services and Markets Act 2000, or

rule 2.4 of the Audit Committee Part of the Rulebook made by the Prudential Regulation Authority under that Act,

as they have effect on IP completion day, or

equivalent functions.

“Audit Directive” means Directive 2006/43/EC of the European Parliament and of the Council on statutory audits of annual accounts and consolidated accounts, amending Council Directives 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC ;

“Auditor General” means—

the Comptroller and Auditor General,

the Auditor General for Scotland,

the Auditor General for Wales, or

the Comptroller and Auditor General for Northern Ireland;

“issuer” has the same meaning as in Part 6 of the Financial Services and Markets Act 2000 (see section 102A(6));

“network” means an association of persons other than a firm co-operating in audit work by way of—

profit-sharing;

cost sharing;

common ownership, control or management;

common quality control policies and procedures;

common business strategy; or

use of a common name;

“public interest entity” means—

an issuer whose transferable securities are admitted to trading on a UK regulated market ;

a credit institution within the meaning given by Article 4(1)(1) of Regulation (EU) No. 575/2013 of the European Parliament and of the Council, which is a CRR firm within the meaning of Article 4(1)(2A) of that Regulation ;

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 39 Auditor's report

Section 495 applies to LLPs, modified so that it reads as follows—

Auditor's report on LLP's annual accounts

(495)

(1) An LLP's auditor must make a report to the LLP's members on all annual accounts of the LLP of which copies are, during his tenure of office to be sent out to members under section 423.

(2) The auditor's report must include—

(a) an introduction identifying the annual accounts that are the subject of the audit and the financial reporting framework that has been applied in their preparation, and

(b) a description of the scope of the audit identifying the auditing standards in accordance with which the audit was conducted.

(3) The report must state clearly whether, in the auditor's opinion, the annual accounts—

(a) give a true and fair view—

(i) in the case of an individual balance sheet, of the state of affairs of the LLP as at the end of the financial year,

(ii) in the case of an individual profit and loss account, of the profit or loss of the LLP for the financial year,

(iii) in the case of group accounts, of the state of affairs as at the end of the financial year and of the profit or loss for the financial year of the undertakings included in the consolidation as a whole, so far as concerns members of the LLP;

(b) have been properly prepared in accordance with the relevant financial reporting framework; and

(c) have been prepared in accordance with the requirements of this Act.

Expressions used in this subsection or subsection (3A) that are defined for the purposes of Part 15 (see sections 464, 471 and 474 ) have the same meaning as in that Part.

(3A) Subsection (3B) applies to the auditors of an LLP which qualifies as a micro-entity in relation to a financial year (see sections 384A and 384B) in their consideration of whether the non-IAS individual accounts of the LLP for that year give a true and fair view as mentioned in subsection (3)(a).

(3B) Where the accounts contain an item of information additional to the micro-entity minimum accounting items, the auditors must have regard to any provision of an accounting standard which relates to that item.

(4) The auditor's report—

(a) must be either unqualified or qualified, and

(b) must include a reference to any matters to which the auditor wishes to draw attention by way of emphasis without qualifying the report.

Section 40 Duties and rights of auditors

Sections 498 to 502 apply to LLPs, modified so that they read as follows—

Duties of auditor

(498)

(1) An LLP's auditor, in preparing his report, must carry out such investigations as will enable him to form an opinion as to—

(a) whether adequate accounting records have been kept by the LLP and returns adequate for their audit have been received from branches not visited by him, and

(b) whether the LLP's individual accounts are in agreement with the accounting records and returns.

(2) If the auditor is of the opinion—

(a) that adequate accounting records have not been kept, or that returns adequate for their audit have not been received from branches not visited by him, or

(b) that the LLP's individual accounts are not in agreement with the accounting records and returns,

the auditor shall state that fact in his report.

(3) If the auditor fails to obtain all the information and explanations which, to the best of his knowledge and belief, are necessary for the purposes of his audit, he shall state that fact in his report.

(4) If the members of the LLP have prepared accounts in accordance with the small LLPs regime and in the auditor's opinion they were not entitled so to do, the auditor shall state that fact in his report.

(5) Where more than one person is appointed as auditor, the report must include a statement as to whether all the persons appointed agree on the statements given under subsections (2) to (5) and, if they cannot agree on those statements, the report must include the opinions of each person appointed and give reasons for the disagreement.

Auditor's general right to information

(499)

(1) An auditor of an LLP—

(a) has a right of access at all times to the LLP's books, accounts and vouchers (in whatever form they are held), and

(b) may require any of the following persons to provide him with such information or explanations as he thinks necessary for the performance of his duties as auditor.

(2) Those persons are—

(a) any member or employee of the LLP;

(b) any person holding or accountable for any of the LLP's books, accounts or vouchers;

(c) any subsidiary undertaking of the LLP which is a body corporate incorporated in the United Kingdom;

(d) any officer, employee or auditor of any such subsidiary undertaking or any person holding or accountable for any books, accounts or vouchers of any such subsidiary undertaking;

(e) any person who fell within any of paragraphs (a) to (d) at a time to which the information or explanations required by the auditor relates or relate.

(3) A statement made by a person in response to a requirement under this section may not be used in evidence against him in criminal proceedings except proceedings for an offence under section 501.

(4) Nothing in this section compels a person to disclose information in respect of which a claim to legal professional privilege (in Scotland, to confidentiality of communications) could be maintained in legal proceedings.

Auditor's right to information from overseas subsidiaries

(500)

(1) Where a parent LLP has a subsidiary undertaking that is not a body corporate incorporated in the United Kingdom, the auditor of the parent LLP may require it to obtain from any of the following persons such information or explanations as he may reasonably require for the purposes of his duties as auditor.

(2) Those persons are—

(a) the undertaking;

(b) any officer, employee or auditor of the undertaking;

(c) any person holding or accountable for any of the undertaking's books, accounts or vouchers;

(d) any person who fell within paragraph (b) or (c) at a time to which the information or explanations relates or relate.

(3) If so required, the parent LLP must take all such steps as are reasonably open to it to obtain the information or explanations from the person concerned.

(4) A statement made by a person in response to a requirement under this section may not be used in evidence against him in criminal proceedings except proceedings for an offence under section 501.

(5) Nothing in this section compels a person to disclose information in respect of which a claim to legal professional privilege (in Scotland, to confidentiality of communications) could be maintained in legal proceedings.

Auditor's right to information: offences

(501)

(1) A person commits an offence who knowingly or recklessly makes to an auditor of an LLP a statement (oral or written) that—

(a) conveys or purports to convey any information or explanations which the auditor requires, or is entitled to require, under section 499, and

(b) is misleading, false or deceptive in a material particular.

(2) A person guilty of an offence under subsection (1) is liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);

(b) on summary conviction—

(i) in England and Wales, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both);

(ii) in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum (or both).

(3) A person who fails to comply with a requirement under section 499 without delay commits an offence unless it was not reasonably practicable for him to provide the required information or explanations.

(4) If a parent LLP fails to comply with section 500, an offence is committed by—

(a) the LLP, and

(b) every member of the LLP who is in default.

(5) A person guilty of an offence under subsection (3) or (4) is liable on summary conviction to a fine not exceeding level 3 on the standard scale.

(6) Nothing in this section affects any right of an auditor to apply for an injunction (in Scotland, an interdict or an order for specific performance) to enforce any of his rights under section 499 or 500.

Auditor's rights in relation to meetings

(502)

(1) An LLP's auditor is entitled—

(a) to receive all notices of, and other communications relating to, any meeting which a member of the LLP is entitled to receive, where any part of the business of the meeting concerns them as auditors,

(b) to attend any meeting of the LLP where any part of the business of the meeting concerns them as auditors, and

(c) to be heard at any meeting which he attends on any part of the business of the meeting which concerns him as auditor.

(2) Where the auditor is a firm, the right to attend or be heard at a meeting is exercisable by an individual authorised by the firm in writing to act as its representative at the meeting.

Section 41 Signature of auditor's report

Sections 503 to 506 apply to LLPs, modified so that they read as follows—

Signature of auditor's report

(503)

(1) The auditor's report must state the name of the auditor and be signed and dated.

(2) Where the auditor is an individual, the report must be signed by him.

(3) Where the auditor is a firm, the report must be signed by the senior statutory auditor in his own name, for and on behalf of the auditor.

(4) Where more than one person is appointed as auditor, the report must be signed by all those appointed.

Senior statutory auditor

(504)

(1) The senior statutory auditor means the individual identified by the firm as senior statutory auditor in relation to the audit in accordance with—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) ... any relevant guidance issued by—

(i) the Secretary of State, or

(ii) the Financial Reporting Council Limited.

(2) The person identified as senior statutory auditor must be eligible for appointment as auditor of the LLP in question (see Chapter 2 of Part 42 of this Act).

(3) The senior statutory auditor is not, by reason of being named or identified as senior statutory auditor or by reason of his having signed the auditor's report, subject to any civil liability to which he would not otherwise be subject.

(4) An order appointing a body for the purpose of subsection (1)(b)(ii) is subject to negative resolution procedure.

Names to be stated in published copies of auditor's report

(505)

(1) Every copy of the auditor's report that is published by or on behalf of the LLP must—

(a) state the name of the auditor and (where the auditor is a firm) the name of the person who signed it as senior statutory auditor, or

(b) if the conditions in section 506 (circumstances in which names may be omitted) are met, state that a determination has been made and notified to the Secretary of State in accordance with that section.

(1A) If more than one person is appointed as auditor, the reference in subsection (1)(a) to the name of the auditor is to be read as a reference to the names of all the auditors.

(2) For the purposes of this section an LLP is regarded as publishing the report if it publishes, issues or circulates it or otherwise makes it available for public inspection in a manner calculated to invite members of the public generally, or any class of members of the public, to read it.

(3) If a copy of the auditor's report is published without the statement required by this section, an offence is committed by—

(a) the LLP, and

(b) every designated member of the LLP 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.

Circumstances in which names may be omitted

(506)

(1) An auditor’s name and, where the auditor is a firm, the name of the person who signed the report as senior statutory auditor, may be omitted from—

(a) published copies of the report, and

(b) the copy of the report delivered to the registrar under Chapter 10 of Part 15 (filing of accounts and reports),

if the following conditions are met.

(2) The conditions are that the LLP—

(a) considering on reasonable grounds that statement of the name would create or be likely to create a serious risk that the auditor or senior statutory auditor, or any other person, would be subject to violence or intimidation, has determined that the name should not be stated, and

(b) has given notice of the determination to the Secretary of State, stating—

(i) the name and registered number of the LLP,

(ii) the financial year of the LLP to which the report relates, and

(iii) the name of the auditor and (where the auditor is a firm) the name of the person who signed the report as senior statutory auditor.

Section 42 Offences in connection with auditor's report

Sections 507 to 509 apply to LLPs, modified so that they read as follows—

Offences in connection with auditor's report

(507)

(1) A person to whom this section applies commits an offence if he knowingly or recklessly causes a report under section 495 (auditor's report on LLP's annual accounts) to include any matter that is misleading, false or deceptive in a material particular.

(2) A person to whom this section applies commits an offence if he knowingly or recklessly causes such a report to omit a statement required by—

(a) section 498(2)(b) (statement that LLP's accounts do not agree with accounting records and returns),

(b) section 498(3) (statement that necessary information and explanations not obtained), or

(c) section 498(4) (statement that members wrongly prepared accounts in accordance with the small LLPs regime).

(3) This section applies to—

(a) where the auditor is an individual, that individual and any employee or agent of his who is eligible for appointment as auditor of the LLP;

(b) where the auditor is a firm, any director, member, employee or agent of the firm who is eligible for appointment as auditor of the LLP.

(4) A person guilty of an offence under this section is liable—

(a) on conviction on indictment, to a fine;

(b) on summary conviction, to a fine not exceeding the statutory maximum.

Guidance for regulatory and prosecuting authorities: England, Wales and Northern Ireland

(508)

(1) The Secretary of State may issue guidance for the purpose of helping relevant regulatory and prosecuting authorities to determine how they should carry out their functions in cases where behaviour occurs that—

(a) appears to involve the commission of an offence under section 507 (offences in connection with auditor's report), and

(b) has been, is being or may be investigated pursuant to arrangements—

(i) under paragraph 15 of Schedule 10 (investigation of complaints against auditors and supervisory bodies), or

(ii) of a kind mentioned in paragraph 24 of that Schedule (independent investigation for disciplinary purposes of public interest cases).

(2) The Secretary of State must obtain the consent of the Attorney General before issuing any such guidance.

(3) In this section “ relevant regulatory and prosecuting authorities ” means—

(a) supervisory bodies within the meaning of Part 42 of this Act,

(b) bodies to which the Secretary of State may make grants under section 16(1) of the Companies (Audit, Investigations and Community Enterprise) Act 2004 (c.27) (bodies concerned with accounting standards etc),

(c) the Director of the Serious Fraud Office,

(d) the Director of Public Prosecutions or the Director of Public Prosecutions for Northern Ireland, and

(e) the Secretary of State.

(4) This section does not apply to Scotland.

Guidance for regulatory authorities: Scotland

(509)

(1) The Lord Advocate may issue guidance for the purpose of helping relevant regulatory authorities to determine how they should carry out their functions in cases where behaviour occurs that—

(a) appears to involve the commission of an offence under section 507 (offences in connection with auditor's report), and

(b) has been, is being or may be investigated pursuant to arrangements—

(i) under paragraph 15 of Schedule 10 (investigation of complaints against auditors and supervisory bodies), or

(ii) of a kind mentioned in paragraph 24 of that Schedule (independent investigation for disciplinary purposes of public interest cases).

(2) The Lord Advocate must consult the Secretary of State before issuing any such guidance.

(3) In this section “ relevant regulatory authorities ” means—

(a) supervisory bodies within the meaning of Part 42 of this Act,

(b) bodies to which the Secretary of State may make grants under section 16(1) of the Companies (Audit, Investigations and Community Enterprise) Act 2004 (c.27) (bodies concerned with accounting standards etc), and

(c) the Secretary of State.

(4) This section applies only to Scotland.