# Why an LLP Does Not Need an Audit (and When It Still Does)

> A Limited Liability Partnership (LLP) is not subject to statutory audit under the Limited Liability Partnerships Act 2012 — but it must still keep accounting records and lodge an annual declaration with SSM.

- Category: audit
- Language: en
- Status: published
- Updated: 2026-08-08
- Canonical: https://negaraku.md/en/audit/llp-audit-exemption-malaysia

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Many entrepreneurs choose a Limited Liability Partnership (LLP) partly because it does not have to pay for an annual audit. Unlike a private limited company, an LLP can operate for years without a single auditor ever looking at its accounts — and that is perfectly legal.

## Does an LLP have to be audited?

No. The Limited Liability Partnerships Act 2012 imposes no statutory audit requirement on an LLP. Section 69(5) states it plainly: "subject to the limited liability partnership agreement, the accounts of a limited liability partnership are not required to be audited."

The official guidance booklet of the Companies Commission of Malaysia (SSM) says the same thing: unless provided for in the agreement, there is no mandatory audit requirement for an LLP. This is one of the key advantages of an LLP over a private limited company, which is generally required to submit audited financial statements.

## So when is an audit still required?

The crucial phrase in section 69(5) is "subject to the agreement". The audit exemption is a default, not an absolute — it can be overridden by the LLP itself.

- **The LLP agreement requires it.** If the partners include an audit clause in the LLP agreement, that audit becomes contractually mandatory.
- **Commercial demand.** A bank, investor or joint-venture partner may require audited accounts as a condition of financing or investment, even though the law does not demand it.
- **Professional practice.** An LLP carrying on a professional practice (for example an accounting or law firm) may also be subject to the rules of its respective professional body; confirm the specific requirements directly with the relevant regulator, as this falls outside the scope of the LLP Act 2012.

## If there is no audit, what is still required?

The audit exemption does not mean an LLP is free of financial obligations. Two core duties remain under the Act.

| Obligation | Provision | Details |
| --- | --- | --- |
| Keep accounting records | Section 69(1) | Records sufficient to explain the transactions and financial position, giving a true and fair view |
| Retain records | Section 69(2) | Not less than seven years from the end of the relevant financial year |
| Annual Declaration | Section 68(1)–(2) | Signed by any two partners as to solvency; within 90 days of the end of the financial year |
| First declaration | Section 68(3) | Not later than 18 months from the date of registration of the LLP |

Failure to comply with these duties carries real penalties. Failure to keep sufficient accounting records (section 69(6)) may attract a fine of up to RM50,000 or imprisonment of up to six months or both. Failure to lodge the Annual Declaration (section 68(5)) may attract a fine of up to RM20,000, and a further fine of up to RM500 a day if the offence continues.

## A quick example

A consulting LLP registered on 1 March with a financial year ending 31 December does not need to appoint an auditor. Nevertheless, its partners must still keep orderly ledgers and receipts, retain them for seven years, and ensure that two of them sign and lodge the Annual Declaration with SSM within 90 days after 31 December each year.

## What's next

Check your LLP agreement: if it contains an audit clause, the statutory exemption no longer applies to you. Also confirm your LLP's financial year-end date so that the Annual Declaration is lodged on time through SSM's MyLLP portal. For further details, refer to the full text of the LLP Act 2012 and SSM's official LLP guidance booklet listed in the sources.

## Sources

- Akta 743 — Akta Perkongsian Liabiliti Terhad 2012 (Undang-Undang Malaysia) — https://www.kpdn.gov.my/images/2024/awam/akta/ssm/Act%20743.pdf (Kementerian Perdagangan Dalam Negeri dan Kos Sara Hidup (KPDN))
- Limited Liability Partnership (Booklet) — https://www.ssm.com.my/Pages/Publication/Booklet/document/LLP_bkengLS_update.PDF (Suruhanjaya Syarikat Malaysia (SSM))

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