Section 74 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.
Section 74 is the residual penalty clause. Where an LLP, a partner, a designated partner or any other person contravenes the Act or the rules, or a condition of an approval, and no penalty or punishment is provided elsewhere in the Act, section 74 applies. As substituted in 2021, it is a penalty of Rs 5,000 with Rs 100 a day for a continuing contravention, capped at Rs 1,00,000. If you are unsure whether a lapse is covered, speak to our legal consultation team.
Section 74 applies where no penalty or punishment is provided elsewhere in the Act. The person in default is liable to a penalty of five thousand rupees and, in case of a continuing contravention, a further penalty of one hundred rupees for each day after the first, subject to a maximum of one lakh rupees. It covers breaches of the Act, the rules and conditions of any approval, sanction, consent, confirmation, recognition, direction or exemption. Before 2021 it was a fine of Rs 5,000 to Rs 5,00,000.
The text now in force
Clause 24 of the 2021 Act substituted section 74:
"If a limited liability partnership or any partner or any designated partner or any other person contravenes any of the provisions of this Act or the rules made thereunder, or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the limited liability partnership or any partner or any designated partner or any other person, who is in the default, shall be liable to a penalty of five thousand rupees and in case of a continuing contravention with a further penalty of one hundred rupees for each day after the first during which such contravention continues, subject to a maximum of one lakh rupees."
| Element | Provision |
|---|---|
| Who | The LLP, a partner, a designated partner or any other person, "who is in the default" |
| What | Contravening the Act, the rules, or a condition, limitation or restriction of an approval, sanction, consent, confirmation, recognition, direction or exemption |
| Gate | Only where "no penalty or punishment is provided elsewhere in this Act" |
| Base penalty | Rs 5,000 |
| Continuing contravention | Further Rs 100 for each day after the first |
| Cap | Rs 1,00,000 |
How to read it
- A fallback, not a first resort. Section 74 works only where nothing else in the Act prescribes a penalty or punishment. Many sections now have their own penalty: for example section 13(4) (Rs 500 a day, maximum Rs 50,000), section 35(2) (Rs 100 a day, maximum Rs 1,00,000 for the LLP and Rs 50,000 for designated partners), section 60(4) and section 62(4). Those specific provisions govern their own defaults; section 74 does not add to them.
- It reaches the rules. The words "or the rules made thereunder" bring breaches of the LLP Rules into the net where the rules and the Act provide no separate consequence.
- It reaches conditions of approvals. The section covers breach of a "condition, limitation or restriction" attached to an approval, sanction, consent, confirmation, recognition, direction or exemption. The Act does not list which approvals; the text speaks generally.
- Any other person. The words "or any other person" extend the net beyond the LLP and its partners, to those who are "in the default".
- The cap is a single figure. Unlike many other 2021 penalty provisions that give separate caps for the LLP and for partners, section 74 states one maximum, "one lakh rupees". The text does not say whether that cap applies to each person or in total; check the official text if the point matters.
- The first day. The additional Rs 100 runs "for each day after the first", so the base Rs 5,000 covers the first day, and the daily amount starts from the second day.
Worked example. An LLP breaches a rule that carries no consequence of its own, and the default lasts thirty days. The base penalty is Rs 5,000 for the first day, plus Rs 100 for each of the next twenty-nine days, which is Rs 2,900, so Rs 7,900 in all, well below the cap of Rs 1,00,000. At that rate the cap would be reached only after a very long default (the figures are the Act's; the arithmetic is ours).
What section 74 said before 2021
The printed original: "Any person guilty of an offence under this Act for which no punishment is expressly provided shall be liable to a fine which may extend to five lakh rupees but which shall not be less than five thousand rupees and with a further fine which may extend to fifty rupees for every day after the first day after which the default continues."
| Before 2021 | After 2021 | |
|---|---|---|
| Nature | Fine for an "offence" | "Penalty" for contravention |
| Amount | Not less than Rs 5,000, up to Rs 5,00,000 | Rs 5,000 |
| Daily component | Up to Rs 50 for every day after the first | Rs 100 for each day after the first |
| Cap | Fine range up to Rs 5,00,000 | Maximum Rs 1,00,000 |
| Scope | Offence under the Act | Contravention of Act, rules or conditions of approvals |
The change in nature matters: a "penalty" is imposed by an adjudicating officer under section 76A (see our article on sections 76 and 76A), whereas a "fine" follows conviction in court. The old section was a fine for an offence; the new one is a penalty for a contravention. The adjudicating officer must give a hearing before imposing a penalty (76A(4)). Small LLPs and start-up LLPs pay half the penalty under the proviso to section 76A(3), subject to a cap.
Related reading
For the full range of penalties across the Act, see our post on penalty provisions under the LLP Act and the one on compliances of an LLP and penalties for non-compliance. Check amounts in those against the official text, since they may predate the 2021 changes.
Need help with a default under the Act?
A default that falls under section 74 can be rectified, and an early filing or correction limits the daily penalty. Our legal consultation team can identify which provision applies to your default and what to do next.
Key takeaways
- Section 74 applies only where no penalty or punishment is provided elsewhere in the Act.
- Penalty of Rs 5,000, plus Rs 100 for each day after the first for continuing contravention, maximum Rs 1,00,000.
- It covers contraventions of the Act, the rules and conditions of approvals and exemptions.
- It applies to the LLP, partners, designated partners and any other person in default.
- Before 2021 it was a fine of Rs 5,000 to Rs 5,00,000 plus up to Rs 50 a day.
Read next
- Sections 76–76A: offences by LLPs and adjudication of penalties
- Sections 72–73: jurisdiction of Tribunal and Tribunal orders
- Penalty Provisions Under LLP Act: Complete List
- Compliances of LLP and Penalties for Non-Compliance
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.