Section 2 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
This article covers the rest of section 2(1), clauses (c), (i), (j), (k), (l), (m), (r), (ra), (s), (t), (ta) and (u), and sub-section (2). Three came in or changed through the 2021 Act: (ra) Regional Director, (s) Registrar and (ta) small limited liability partnership. The first part, section 2, definitions part 1, covers the clauses on body corporate, business, partner and LLP agreement. Whether your LLP counts as "small" affects its obligations, and our LLP registration team can help you plan around it.
A "small limited liability partnership" is one whose contribution does not exceed twenty-five lakh rupees (or a higher prescribed amount, not exceeding five crore rupees) and whose turnover, as per the Statement of Accounts and Solvency for the immediately preceding financial year, does not exceed forty lakh rupees (or a higher prescribed amount, not exceeding fifty crore rupees), or which meets other prescribed requirements, and which fulfils prescribed terms and conditions (2(1)(ta)). The "Tribunal" is the National Company Law Tribunal under section 408 of the Companies Act, 2013 (2(1)(u)). Words not defined in the Act take their meaning from the Companies Act, 2013 (2(2)).
Clauses covered here
| Clause | Term | Source of the meaning |
|---|---|---|
| (c) | Appellate Tribunal | NCLAT under section 410 of the Companies Act, 2013 |
| (i) | Court | Court with jurisdiction under section 77, for offences |
| (j) | designated partner | Partner designated under section 7 |
| (k) | entity | Any body corporate, widened for certain sections |
| (l) | financial year | 1 April to 31 March, with a proviso |
| (m) | foreign limited liability partnership | LLP formed outside India with a place of business in India |
| (r) | prescribed | Prescribed by rules under the Act |
| (ra) | Regional Director | Inserted in 2021 |
| (s) | Registrar | Substituted in 2021 |
| (t) | Schedule | A Schedule to the Act |
| (ta) | small limited liability partnership | Inserted in 2021 |
| (u) | Tribunal | NCLT under section 408 of the Companies Act, 2013 |
(c) "Appellate Tribunal" and (u) "Tribunal"
The Appellate Tribunal is the National Company Law Appellate Tribunal constituted under section 410 of the Companies Act, 2013. The Tribunal is the National Company Law Tribunal constituted under section 408 of the Companies Act, 2013. Both clauses were changed by the 2021 Act: the earlier references were to "sub-section (1) of section 10FR" and "sub-section (1) of section 10FB", now replaced by the 2013 Act sections.
One timing note from the footnote under section 1: the notification bringing the Act into force on 31 March 2009 excepted clauses (c) and (u) of section 2(1). The text does not tell us from when they applied; check the official Gazette if that date matters. For how the Tribunal's powers fit in, see our winding up and dissolution guide.
(i) "Court"
With respect to any offence under the Act, "Court" means the Court having jurisdiction as per the provisions of section 77.
(j) "designated partner"
Any partner designated as such pursuant to section 7. The rules on who may be one, how many, and the resident test are in section 7.
(k) "entity"
"Entity" means any body corporate and includes, for the purposes of sections 18, 46, 47, 48, 49, 50, 52 and 53, a firm set up under the Indian Partnership Act, 1932. A caution: the clean text still prints section 18 in this list, although the 2021 Act omits section 18 (clause 9 of the 2021 Act). The definition is quoted here exactly as printed; the reference to section 18 now has nothing to attach to.
(l) "financial year"
For an LLP, the period from 1 April of a year to 31 March of the following year.
Proviso: for an LLP incorporated after 30 September of a year, the financial year may end on 31 March of the year next following that year. In plain terms, an LLP incorporated in, say, November 2026 may treat its first financial year as running to 31 March 2028. The word "may" gives a choice, and the text does not say who makes it or how it is recorded.
(m) "foreign limited liability partnership"
An LLP formed, incorporated or registered outside India which establishes a place of business within India. Both conditions must be met: foreign formation and an Indian place of business.
(r) "prescribed", (ra) "Regional Director", (s) "Registrar", (t) "Schedule"
- Prescribed means prescribed by rules made under the Act. Forms and fees are in the LLP Rules, 2009 as amended.
- Regional Director (inserted in 2021) is a person appointed as such by the Central Government for the purposes of this Act or the Companies Act, 2013, as the case may be.
- Registrar (substituted in 2021) is a person appointed by the Central Government as Registrar, Additional Registrar, Joint Registrar, Deputy Registrar or Assistant Registrar, for the purposes of this Act or the Companies Act, 2013, as the case may be. Before the substitution, the clause covered a Registrar "having the duty of registering companies under the Companies Act, 1956".
- Schedule means a Schedule to the Act.
(ta) "small limited liability partnership"
This is the most searched definition. An LLP is "small" if it satisfies the following:
| Test | As printed |
|---|---|
| Contribution (clause (i)) | Does not exceed twenty-five lakh rupees, or such higher amount, not exceeding five crore rupees, as may be prescribed |
| and Turnover (clause (ii)) | Per the Statement of Accounts and Solvency for the immediately preceding financial year, does not exceed forty lakh rupees, or such higher amount, not exceeding fifty crore rupees, as may be prescribed |
| or Other requirements (clause (iii)) | Which meets such other requirements as may be prescribed |
| and Conditions | Fulfils such terms and conditions as may be prescribed |
How the clause is built: clauses (i) and (ii) are joined by "and"; clause (iii) is joined by "or". The closing words, "and fulfils such terms and conditions as may be prescribed", apply to the LLP in any case. The text gives only the base limits and the ceilings; the actual current figures, if raised, are in the rules, which this article does not state. What a small LLP gets in return (for example, in penalties and filings) is found in other provisions, so read this clause with our note on the new concept of small LLP.
Example. Tara & Co LLP has contributions of Rs 20 lakh and turnover of Rs 35 lakh in the Statement of Accounts and Solvency for the previous year. On the printed limits it passes both tests, subject to the prescribed terms and conditions. If its turnover were Rs 45 lakh, it would fail the base turnover test unless a higher amount has been prescribed, or it meets other prescribed requirements.
Section 2(2): words defined in the Companies Act
Words and expressions used and not defined in this Act but defined in the Companies Act, 2013 have the meanings given in that Act. The 2021 Act replaced "the Companies Act, 1956" with "the Companies Act, 2013" in this and other places (clause 2 of the 2021 Act).
Need help with LLP classification?
Whether an LLP is "small" depends on figures taken from its own accounts, so the numbers have to be right before they are relied on. Our LLP registration service sets up the contribution structure from the start, and our team can review how your planned contributions and turnover sit against these limits.
Key takeaways
- A small LLP must pass the contribution test and the turnover test, or meet other prescribed requirements, and fulfil the prescribed terms and conditions (2(1)(ta)).
- "Tribunal" is the NCLT (section 408) and "Appellate Tribunal" the NCLAT (section 410) of the Companies Act, 2013.
- "Registrar" and "Regional Director" are linked to appointments for this Act or the Companies Act, 2013.
- The financial year runs 1 April to 31 March, with a later end allowed for an LLP incorporated after 30 September.
- Undefined words take their meaning from the Companies Act, 2013 (2(2)).
Read next
- Section 2 Part 1: body corporate, business, partner and LLP agreement
- Section 7: designated partners
- New Concept of Small LLP and Other Changes in LLP Act
- Key Highlights of LLP (Amendment) Act, 2021
Disclaimer: Based on the Limited Liability Partnership Act, 2008 as amended by the Limited Liability Partnership (Amendment) Act, 2021, as consulted on 1 October 2026. Forms, fees and procedure are set by the LLP Rules, 2009 as amended from time to time. This article is general information, not legal advice; check the official text before acting.