The Central Government is thinking of introducing new accounting standards for Limited Liability Partnerships (LLPs), especially for those with an annual turnover exceeding ₹250 crore.
This will align LLP accounting practices with those of companies for better accountability in reporting financial matters.
The government may introduce these changes in the upcoming winter session of Parliament, with the Ministry of Corporate Affairs (MCA) preparing to amend the LLP Act and other relevant regulations.
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A draft proposal has been floated by the Institute of Chartered Accountants of India (ICAI) for the notification of new norms, which are likely to be implemented in the form of adjustments to the Companies (Accounting Standards) Rules and the LLP Act.
Read Also: Exposure Draft of Guidance Note on Financial Statements of Limited Liability Partnerships
These modifications will require large LLPs to adopt more stringent disclosure requirements, making them comparable to corporations in terms of financial transparency.
In addition to increasing the reporting obligations for large LLPs, the government is also considering reforms that will provide the Ministry and regulatory authorities with greater oversight and compliance tools. The changes will affect LLPs based on their size, with “Level-1 LLPs” being those that report an annual turnover exceeding ₹250 crore.
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This development reflects a broader effort to modernise India’s accounting framework, which has seen increasing calls for enhanced regulatory measures in recent years. The changes are expected to boost investor confidence and improve the business environment, particularly for large firms that operate in sectors such as finance and manufacturing.
If the government passes these amendments during the winter session of Parliament, the possibility of new accounting standards being implemented as early as possible, like the beginning of the 2025-26 financial year is very high.
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