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ArticlesOctober 9, 20230

The role of auditors in a Limited Liability Company (LLC)

Limited Liability Companies (LLCs) with more than 15 members are required to appoint auditors. Auditors are part of the governing and oversight bodies of the company.

The legal framework for auditors in a limited liability company is regulated by applying the provisions provided for the appointment of auditors in joint-stock companies. In the case of a limited liability company (LLC), auditors provide assurances to members that they are properly informed about the management of the company and draw their attention to irregularities in the administration of the company, as well as to legal violations and the articles of incorporation.
Auditors are responsible for verifying the requests and complaints of the members, and if they find them justified, they prepare a report and present it to the general assembly of members.

Auditors must check:

  • The management of the company;
  • The legality of the preparation of financial statements and their conformity with the records held by the company;
  • The method of keeping records and evaluating the assets in accordance with the rules established for the preparation and presentation of financial statements.

In addition, auditors can make proposals regarding financial statements and the distribution of profits. All the findings of auditors, as well as their proposals for the smooth conduct of the activity, are included in a detailed report presented to the general assembly periodically (monthly, quarterly, semi-annually, or annually).
If the number of members exceeds 15, the appointment of auditors is mandatory. The obligation to appoint an auditor arises from the idea that in companies with up to 15 members, there is no need to appoint a control body, as the control is carried out by each member individually.
Regarding remuneration, auditors are to receive a fixed remuneration determined by the articles of incorporation or by the subsequent general assembly. The income earned by auditors is, however, treated as salaries.

Auditors cannot be:

  • Relatives or in-laws up to the fourth degree or spouses of administrators;
  • Individuals receiving a salary or remuneration from administrators or from the company, or whose employers are in contractual relations or in competition with them;
  • Individuals who are prohibited from serving as members of the board of directors;
  • Individuals who, during the exercise of this function, hold control duties within the Ministry of Public Finance or other public institutions, except in cases expressly provided by law.

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