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Further information

Dormant LLP accounts

1. What is a dormant LLP?

An LLP is dormant if it has had no 'significant accounting transactions' during the accounting period. A significant accounting transaction is one which the LLP should enter in its accounting records.

When determining whether an LLP is dormant you can disregard the following transactions:

fees paid to the registrar for a change of LLP name and filing annual returns; and
payment of a civil penalty for late filing of accounts.

2. What are the conditions that a dormant LLP must meet to be exempt from audit?

A dormant LLP is exempt from having an audit for that financial year if:

it has been dormant since its formation; or
it has been dormant since the end of the previous financial year and it meets the following conditions:
- it is entitled to prepare individual accounts in accordance with the small LLPs regime or would have been so entitled but for the fact that it is a member of an ineligible group, and;
it is not required to prepare group accounts for that year.

3. What exemption is available?

Dormant LLPs can claim exemption from audit and need only prepare and deliver to Companies House an abbreviated balance sheet and notes. You do not have to include a profit and loss account in dormant LLP accounts filed at Companies House.

An LLP may not take advantage of the dormant LLP audit exemption if it was at any time in the financial year in question an LLP that:

is an authorised insurance company, a banking LLP, an e-money issuer, a MiFID (ie Markets in Financial Instruments Directive) investment firm or a UCITS (i.e.Undertakings for Collective Investment in Transferable Securities) management company; or
carries on insurance market activity.
An LLP is not entitled to the dormant LLP audit exemption unless its balance sheet contains the statements required by the Act. Question 5 covers the statements.

4. What information must dormant LLP accounts contain?

Dormant LLP accounts submitted to Companies House need not include a profit and loss account. Unaudited dormant accounts are much simpler than those of a trading LLP, but must contain:

a balance sheet containing statements above the designated member’s signature to the effect that the LLP was dormant throughout the accounting period;
any previous year's figures for comparison - even though there are no items of income or expenditure for the current year; and
certain notes to the balance sheet - a full list of items to be covered appears at the end of this chapter.
The right to prepare a dormant balance sheet for filing at Companies House does not affect the LLP’s obligations to prepare full accounts for its members.

5. What statements do I need to make on the balance sheet?

The following statements must appear above the designated member’s signature:

'For the year ending ………………………. (dd/mm/yyyy) the LLP was entitled to exemption from audit under section 480 of the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit)(Application of Companies Act 2006) Regulations 2008) relating to dormant LLPs.

The members acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.'

An LLP that qualifies as small should also include the following statement on the balance sheet:

'These accounts have been prepared in accordance with the provisions applicable to limited liability partnerships subject to the small limited liability partnerships regime'.

6. How long do I have to submit dormant accounts to Companies House?

You have the same time allowed for filing as for other accounts and the same penalties, for late filing apply. Further information can be found in our guide to Limited Liability Partnerships Late Filing Penalties.

7. What happens if my LLP starts trading again?

The LLP will cease to be exempt from audit as a dormant LLP if it:

begins commercial or trading activities during the financial period; or
would no longer qualify for some other reason e.g. because there have been significant accounting transactions that need to be entered in its accounting records.
If either of these happened, you might have to submit full accounts for the financial year in which the LLP ceased to be exempt, and the designated members might need to appoint auditors for the LLP. However, it may be that the LLP would qualify for exemptions as a medium-sized or small LLP.