Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Companies: audit from day one
Under the Companies Act, every company must have its accounts audited by a chartered accountant each year from incorporation — there is no turnover threshold and no exemption for a small or dormant company. You must also appoint your first auditor within 30 days of incorporation.
LLPs: only above a threshold
An LLP is treated more lightly: a statutory audit is required only when turnover exceeds ₹40 lakh or capital contribution exceeds ₹25 lakh in a year. Below both, an LLP can file without an audit. Confirm the current thresholds. This is one practical difference between the two structures.
What this means in practice — an example
A founder who incorporates a Private Limited company in March but earns nothing that year still needs a statutory audit and must file AOC-4 with audited accounts. A bootstrapped LLP under the thresholds would not. This statutory audit is separate from a tax audit under the Income-tax Act, which kicks in only above its own turnover limits — a company can need a statutory audit with no tax audit, or both, so do not treat them as the same thing. Appointing your first auditor within 30 days of incorporation is the step founders most often miss. Our startup service can handle the audit and filings.