ICAI Updates Balance sheet formats for Non-Corporate Entities and LLPs

August 11, 2025

What is a Non-Corporate Entity?

A non-corporate entity refers to any business or organization that is not registered as a company under the Companies Act, 2013. These entities operate without the formal structure of a corporation and are typically governed by other laws such as the Indian Partnership Act, 1932 or relevant tax laws.

Common examples of non-corporate entities include:

• Individuals
• Partnership Firms
• Hindu Undivided Families (HUFs)
• Trusts
• Associations of Persons (AOPs)
• Bodies of Individuals (BOIs)

It is important to note that the term "non-corporate entity" is not defined under any specific section of the Income Tax Act, 1961 or the Companies Act, 2013. However, it is widely used in taxation, compliance, and regulatory contexts to differentiate these entities from companies (corporate entities).

What is a Limited Liability Partnership (LLP)?

A Limited Liability Partnership (LLP) is a unique form of business entity that combines the benefits of a traditional partnership with the advantages of limited liability enjoyed by companies. It offers flexibility in management and operations while ensuring that partners are not personally liable for the debts of the business, beyond their agreed contributions.

LLPs in India are governed by the Limited Liability Partnership Act, 2008

To explore and understand the intricacies of an LLP—its structure, compliance, benefits and Registration process—please click here to read the LLP Registration guide on our website,

PURPOSE OF THE GUIDANCE NOTE ISSUED BY ICAI

ICAI issued a Guidance note on financial statements of Non-Corporate Entities and LLPs with the sole purpose to provide standardised formats for financial statements of non-corporate entities to enhance the quality, understandability, relevance, reliability, comparability, consistency and comprehensiveness of financial statements prepared by entities and Limited Liability Partnership.

The Technical Guide on Financial Statements of Non-corporate entities was issued in the year 2022. This Guide recommended the formats for preparation of financial statements of non-corporate entities so as to standardise the information to be presented in the financial statements of non-corporate entities. In order to prescribe more authoritative guidance for the members of ICAI, this Technical Guide was upgraded into a Guidance Note on Financial Statements of Non-Corporate Entities.

In view of the above, the Technical Guide on Financial Statements of Non-Corporate Entities stands superseded by the Guidance Note with effect from April 1, 2024.

Effective for financial statements covering periods beginning on or after April 1, 2024, this Guidance Note marks a pivotal development in the regulatory landscape for LLPs and Non-Corporate Entity, promising a new era of more standardized and transparent financial communication.

Here's a breakdown of how the Guidance Note achieves this standardization:

FORMAT FOR NON-CORPORATE ENTITIES

Name of the Non-Corporate Entity ………………………

Balance Sheet as at ………………………

(Amount in Rs. XX)

Name of the Non-Corporate Entity ………………………

Statement of Profit and Loss for the year ended ………………………

(Amount in Rs.)

* wherever applicable

To know further on What accounting standard should Non-Company Entities follow?

FORMAT FOR LLPs

Name of the Limited Liability Partnership ………………………

Balance Sheet as at ………………………

(Amount in Rs. XX)

FORMAT FOR LIMITED LIABILITY PARTNERSHIP

Name of the Limited Liability Partnership ………………………

Statement of Profit and Loss for the year ended ………………………

(Amount in Rs.)

ROUND OFF

Depending upon the Total Income of the Non-Corporate entity, the figures appearing in the Financial Statements may be rounded off as given below: -

Once a unit of measurement is used, it should be used uniformly in the Financial Statements. Note: Not Mandatory, but prescribed.

FAQ’s

1. IS THERE AN EXCEPTION ON APPLICABILITY?

It may be pertinent to note that this Guidance Note is applicable for the purpose of preparation of the financial statements of Non-Corporate Entities except where:
a. Formats/principles are specifically prescribed by the relevant Statute or Regulator or any Authority;
b. Autonomous Bodies under Government of India are required to compile their accounts in a uniform format of accounts as prescribed by Government of India, Ministry of Finance; or
c. Guidance has been specifically given by ICAI (e.g., Educational Institutions, Political Parties, Not-for Profit Entities, etc.).

2. MANDATORY ON WHOM?

Compliance of Guidance Note issued by ICAI is mandatory to be complied by CA in practice while discharging attest function. Responsibility is not on the NCE or LLP.

3. WHAT IF GUIDANCE NOTE IS NOT COMPLIED WITH?

Where the client does not furnish the financial statements in the presentation format or does not comply with the requirements prescribed in the Guidance Note, the auditor is required to disclose the same in his / her report. Qualification required by practicing CA in his/her report E.g.: while doing tax audit of NCE a CA has to give this qualification in Para 3(a) of form 3CB

4. CONSEQUENCE OF NON-COMPLAINCE?

Practicing CA will be held guilty under professional misconduct under clause 9 of Part 1 of the Second Schedule to the Chartered Accountants Act, 1949.

5. IF ANY FIGURES ARE ‘NIL’, THEN WHETHER THAT LINE ITEM CAN BE OMITTED?

The Guidance Note sets out the minimum requirements for disclosure on the face of the Balance Sheet and the Statement of Profit and Loss. It allows flexibility to add or substitute line items when such presentation is relevant to an understanding of the company's financial position or performance. In case there is ‘Nil’ balance in respect of a line item in the current year as well as in previous year, and its omission does not affect the true and fair view of the financial statements, it can be omitted from the financial statements.

6. ARE COMPARITIVE FIGURES OF IMMEDIATELY PRECEDING REPORTING PERIOD IS ALSO REQUIRED TO BE GIVEN IN THE SAME PRESCRIBED FORMAT?

Except in the case of the first Financial Statements prepared by the Non-Corporate entity (after its incorporation) the corresponding amounts (comparatives) for the immediately preceding reporting period for all items shown in the Financial Statements including notes shall also be given.

Our Commitment to Compliance

At B C Shetty & Co., we are fully aligned with the Guidance Note on Financial Statements of Non-Corporate Entities and LLPs, ensuring that every financial statement we prepare reflects accuracy, transparency, and full regulatory compliance.

By partnering with us, you choose a firm that not only understands the evolving statutory landscape but applies it with precision—helping your entity stay compliant, informed, and future-ready. With our expertise across accounting, audit, and advisory, we are the strategic partner you can rely on.