Two documents govern every LLP in India: the LLP Act, 2008 (14 chapters, 81 sections) and the LLP Rules, 2009 (18 chapters, 41 rules) made under it. Together they cover everything an LLP does — forming it, running it, changing its partners, and eventually closing it. Most of it is written in dense legal language. This page explains every chapter, section and rule in plain English, current as of the LLP (Amendment) Act, 2021 (effective 1 April 2022), so a founder, a designated partner, a partner, or a CA/CS checking a reference can find the right provision without wading through the bare Act.
Section vs Rule — what is the difference?
These two get used interchangeably in conversation, but they are legally different things, and knowing which is which tells you where to look.
The Act — passed by Parliament — is the primary law. Its Sections create the LLP structure itself and set out substantive rights, duties, and liabilities: who can be a partner, what a partner is liable for, when an LLP can be wound up. Section 79 of the Act gives the Central Government the power to make Rules to carry the Act into effect. The LLP Rules, 2009 are that delegated legislation — they do not create new rights or obligations beyond what a Section already authorises; they fill in the operating detail: which form to file, what fee to pay, what the deadline is, what document format is required.
A worked example: Section 34 of the Act simply requires an LLP to maintain books of account and file a Statement of Account & Solvency. It is the Rules that specify the actual form (Form 8), the due date (30 October), and the audit threshold. If a Rule ever tried to go beyond what its parent Section allows, the Section would override it — Rules operate strictly within the boundary their Section sets.
| Act / Section | Rules |
|---|
| Made by | Parliament | Central Government (Ministry of Corporate Affairs) |
| Covers | Substantive rights, duties, structure | Forms, fees, timelines, procedure |
| Can be changed by | A further Act of Parliament | A notification — much faster |
| Example | Sec. 34 — must file a Statement of Account & Solvency | Rule specifying Form 8, due 30 October |
What the 2021 amendment actually changed
The LLP (Amendment) Act, 2021 was the first change to the Act since it commenced in 2009, effective 1 April 2022. Three changes matter most in practice:
- Decriminalisation. About a dozen procedural, non-fraud offences that used to carry criminal prosecution now go through an in-house adjudicating officer instead, who imposes a civil monetary penalty. This removed the threat of criminal prosecution for genuinely minor filing defaults.
- "Small LLP" introduced. A new category — contribution up to ₹25 lakh and turnover up to ₹40 lakh — with lighter compliance and lower penalties, mirroring the "small company" concept under the Companies Act.
- New adjudication mechanism (Section 76A). A Central Government officer can now impose and collect penalties directly, with a right of appeal, instead of every default requiring a court prosecution.
Seven sections were inserted (34A, 67A, 67B, 67C, 68A, 76A, 77A), several were substituted, and a few were omitted — the index below reflects the Act as it stands after those changes.
The LLP Act, 2008 — all 14 chapters and 81 sections
Grouped by chapter, in order. Each entry is a plain-English summary, not the legal text — always check the bare Act (mca.gov.in or indiacode.nic.in) before relying on anything formally.
Chapter I — Preliminary (Sections 1–2)
| Section | What it covers |
|---|
| 1 | Short title, extent and commencement — the Act's name and when it took effect (31 March 2009). |
| 2 | Definitions — the meaning of every key term used in the Act: LLP, partner, designated partner, contribution, business, foreign LLP, small LLP, and more. |
Chapter II — Nature of Limited Liability Partnership (Sections 3–10)
| Section | What it covers |
|---|
| 3 | An LLP is a body corporate — a separate legal entity from its partners, with perpetual succession. |
| 4 | The Indian Partnership Act, 1932 does not apply to LLPs — this Act and the LLP Agreement govern instead. |
| 5 | Who can be a partner — any individual or body corporate. |
| 6 | Minimum number of partners — at least 2, at all times. |
| 7 | Designated partners — every LLP needs at least 2, at least one resident in India; who qualifies. |
| 8 | Liabilities of designated partners — their specific legal responsibilities for compliance and filings. |
| 9 | Changes in designated partners — how a vacancy is filled and notified to the Registrar. |
| 10 | Penalty if the designated-partner requirements in Sections 7–9 are not met. |
Chapter III — Incorporation of LLP and Matters Incidental Thereto (Sections 11–21)
| Section | What it covers |
|---|
| 11 | The incorporation document — the subscriber statement filed to register an LLP (Form FiLLiP today). |
| 12 | Incorporation by registration — how and when the Registrar issues the Certificate of Incorporation. |
| 13 | Every LLP must have a registered office, and the process to change it. |
| 14 | Effect of registration — an LLP can sue and be sued, hold property, and contract in its own name. |
| 15 | Naming rules — must end with "LLP" or "Limited Liability Partnership." |
| 16 | Reservation of name before incorporation (RUN-LLP). |
| 17 | MCA can direct a name change if it too closely resembles an existing name or trademark. |
| 18 | An aggrieved party (such as a trademark owner) can apply to have a name changed. |
| 19 | The process for voluntarily changing an LLP's registered name. |
| 20 | Penalty for a non-LLP entity improperly using "LLP" in its name. |
| 21 | Every LLP must display its name and "Limited Liability Partnership"/"LLP" on its office, documents and correspondence. |
Chapter IV — Partners and their Relations (Sections 22–25)
| Section | What it covers |
|---|
| 22 | Eligibility to be partners — named in the incorporation document, or admitted later as the LLP Agreement provides. |
| 23 | Relationship of partners is governed by the LLP Agreement; if there is none (or it is silent), the First Schedule's default rules apply. |
| 24 | Cessation of partnership interest — resignation, death, dissolution, or as the Agreement provides. |
| 25 | Every change in partners must be filed with the Registrar within the prescribed time — Form 3 and Form 4 in practice. |
Chapter V — Extent and Limitation of Liability of LLP and Partners (Sections 26–31)
| Section | What it covers |
|---|
| 26 | Every partner is an agent of the LLP — not of the other partners individually. |
| 27 | The LLP itself is liable for its obligations, met out of its own assets. |
| 28 | A partner is not personally liable for the LLP's obligations solely by being a partner — the core limited-liability protection. |
| 29 | "Holding out" — someone who represents themselves as a partner (when they are not) can be held liable to anyone who relied on that. |
| 30 | Unlimited liability in case of fraud — the liability shield disappears for a partner or the LLP acting with intent to defraud. |
| 31 | Whistle-blowing protection for a partner or employee who gives useful information during an investigation, including a possible reduction in their own penalty for good-faith disclosure. |
Chapter VI — Contributions (Sections 32–33)
| Section | What it covers |
|---|
| 32 | What counts as contribution — cash, property, other tangible or intangible assets, or even a promise to contribute cash/property or perform services. |
| 33 | The obligation to contribute is governed by the LLP Agreement; a creditor who relied on a partner's contribution obligation can enforce it directly. |
Chapter VII — Financial Disclosures (Sections 34–41)
| Section | What it covers |
|---|
| 34 | LLPs must maintain proper books of account and file an annual Statement of Account & Solvency; audit is mandatory only above the prescribed turnover/contribution thresholds. |
| 34A | (Inserted 2021) The Central Government can prescribe accounting and auditing standards for LLPs. |
| 35 | Every LLP must file an annual return (Form 11) within 60 days of the financial year's close. |
| 36 | The incorporation document, partner names, and other filed documents are open for public inspection at the Registrar's office, for a fee. |
| 37 | Penalty for knowingly making a false statement in any document filed under the Act. |
| 38 | The Registrar's power to call for information from an LLP. |
| 39 | Compounding of offences — certain offences can be settled with a fee instead of prosecuted. |
| 40 | The Registrar's power to destroy old records after the prescribed retention period. |
| 41 | Tribunal can order an LLP to file overdue documents. |
Chapter VIII — Assignment and Transfer of Partnership Rights (Section 42)
| Section | What it covers |
|---|
| 42 | A partner's right to a share of profits/losses can be transferred, wholly or partly — but the person receiving it does not automatically become a partner or gain management rights just by taking the transfer. |
Chapter IX — Investigation (Sections 43–54)
| Section | What it covers |
|---|
| 43 | Central Government or Tribunal can order an investigation into an LLP's affairs. |
| 44 | Partners can themselves apply for an investigation. |
| 45 | Only individuals — not a firm or body corporate — can be appointed inspector. |
| 46 | An inspector's power extends to investigating related/associated entities. |
| 47 | Obligation to produce documents and evidence to the inspector. |
| 48 | The inspector's power to seize documents in certain situations. |
| 49 | The inspector's report. |
| 50 | Prosecution based on the inspector's findings. |
| 51 | Application for winding up based on investigation findings. |
| 52 | Proceedings for recovery of damages or property. |
| 53 | Who bears the expenses of the investigation. |
| 54 | The inspector's report is admissible as evidence in legal proceedings. |
Chapter X — Conversion into Limited Liability Partnership (Sections 55–58)
| Section | What it covers |
|---|
| 55 | Conversion from a partnership firm into an LLP (Second Schedule). |
| 56 | Conversion from a private company into an LLP (Third Schedule). |
| 57 | Conversion from an unlisted public company into an LLP (Fourth Schedule). |
| 58 | Registration and effect of conversion — all assets, liabilities and pending legal proceedings of the old entity transfer automatically to the new LLP. |
Chapter XI — Foreign Limited Liability Partnerships (Section 59)
| Section | What it covers |
|---|
| 59 | How a foreign LLP can establish a place of business in India. |
Chapter XII — Compromise, Arrangement or Reconstruction (Sections 60–62)
| Section | What it covers |
|---|
| 60 | An LLP can enter a scheme of compromise or arrangement with creditors/partners, sanctioned by the Tribunal. |
| 61 | The Tribunal's power to enforce a sanctioned compromise or arrangement. |
| 62 | Provisions facilitating reconstruction or amalgamation (merger) of LLPs. |
Chapter XIII — Winding Up and Dissolution (Sections 63–65)
| Section | What it covers |
|---|
| 63 | Winding up and dissolution — voluntarily, or by order of the Tribunal. |
| 64 | The grounds on which the Tribunal can order winding up — inability to pay debts, acting against sovereignty or public order, prolonged default, or just-and-equitable grounds. |
| 65 | Central Government's power to frame detailed winding-up rules — this is also the basis for the administrative strike-off route for a defunct LLP. |
Chapter XIV — Miscellaneous (Sections 66–81)
| Section | What it covers |
|---|
| 66 | A partner can transact business with their own LLP (like a non-partner could) unless the Agreement says otherwise — for example, lending it money. |
| 67 | Central Government can apply Companies Act provisions to LLPs by notification, with modifications. |
| 67A | (Inserted 2021) Establishment of Special Courts for speedy trial of offences under the Act. |
| 67B | (Inserted 2021) Procedure and powers of the Special Court. |
| 67C | (Inserted 2021) Appeal and revision from Special Court orders. |
| 68 | Electronic filing of documents — the legal basis for MCA21's online filing. |
| 68A | (Inserted 2021) Central Government's power to establish registration offices. |
| 69 | Payment of additional fee for late filing — the legal basis for the multiplier late-fee system on Forms 8 and 11. |
| 70 | Enhanced punishment for repeat offenders. |
| 71 | This Act does not bar the application of other laws. |
| 72 | Jurisdiction of the Tribunal and Appellate Tribunal (NCLT/NCLAT) over matters under this Act. |
| 73 | Penalty for not complying with a Tribunal order. |
| 74 | General penalty — the default penalty where none is specifically prescribed elsewhere in the Act. |
| 75 | The Registrar's power to strike a defunct LLP off the register — administratively, without a full winding-up. |
| 76 | Offences by LLPs — the corporate-liability framework, narrowed considerably by the 2021 decriminalisation. |
| 76A | (Inserted 2021) Adjudication of penalties — the in-house adjudicating-officer mechanism that replaced court prosecution for many defaults. |
| 77 | Which courts have jurisdiction to try offences under the Act. |
| 77A | (Inserted 2021) Who can file a complaint (take cognizance) for an offence under the Act. |
| 78 | Central Government's power to alter the Schedules by notification. |
| 79 | The Act's rule-making power — the legal basis for the LLP Rules, 2009 (see "Section vs Rule" above). |
| 80 | Power to remove difficulties — a standard provision letting the government resolve implementation gaps. |
| 81 | Transitional provisions. |
The Schedules
| Schedule | What it covers |
|---|
| First Schedule | Default mutual rights and duties of partners — applies automatically whenever there is no LLP Agreement, or the Agreement is silent on a point. |
| Second Schedule | Conversion of a partnership firm into an LLP. |
| Third Schedule | Conversion of a private company into an LLP. |
| Fourth Schedule | Conversion of an unlisted public company into an LLP. |
The LLP Rules, 2009 — all 18 chapters and 41 rules
The Rules are where the Act's Sections turn into an actual filing — a form number, a fee, a deadline. Structured into 18 chapters and 41 rules (a few lettered rules were inserted later, the same way the Act gained lettered sections). Grouped by chapter, in plain English:
Chapter I — Preliminary (Rules 1–6)
| Rule | What it covers |
|---|
| 1 | Short title and commencement — the Rules took effect alongside the Act on 31 March/1 April 2009. |
| 2 | Definitions used specifically within the Rules. |
| 3 | Forms — the prescribed e-Forms for every filing under the Act. |
| 4 | Authentication of electronic forms — the digital signature (DSC) requirement. |
| 5 | Fees — the fee schedule for each filing, based on the contribution slab. |
| 6 | The manner and conditions for filing documents electronically with the Registrar. |
Chapter II — Nature of Limited Liability Partnership (Rules 7–9)
| Rule | What it covers |
|---|
| 7 | Consent to act as designated partner — Form 9, the consent letter every designated partner must file. |
| 8 | Filing the particulars of a designated partner. |
| 9 | Disqualifications for designated partners — who cannot be one (for example, an undischarged insolvent). |
Chapter III — Designated Partner's Identification Number (Rule 10)
| Rule | What it covers |
|---|
| 10 | The procedure for obtaining a DPIN — now merged into the standard DIN application process. |
Chapter IV — Incorporation of Limited Liability Partnership (Rules 11–20)
| Rule | What it covers |
|---|
| 11 | Filing the incorporation document — the FiLLiP process. |
| 12 | Documents required when a partner is a body corporate rather than an individual. |
| 13 | The format of the statement filed alongside the incorporation document. |
| 14 | The Register of LLPs, and how the LLPIN is assigned. |
| 15 | How documents are formally served on an LLP. |
| 16 | The address used for service of documents — this is the "Rule 16(2)" partners frequently ask about. |
| 17 | Changing the registered office. |
| 18 | Name reservation and the naming restrictions. |
| 19 | Applying to change the name of an LLP incorporated after a similar name was already reserved. |
| 19A | (Inserted later) Allotment of a new name under Section 17(3), when a name dispute is decided against the LLP. |
| 20 | The procedure for changing an LLP's name — this is the "Rule 20(1)" partners frequently ask about. |
Chapter V — Partners and their Relations (Rules 21–22B)
| Rule | What it covers |
|---|
| 21 | Filing information about the LLP Agreement. |
| 22 | Filing changes in partner particulars. |
| 22A | (Inserted later) The Register of Partners every LLP must maintain. |
| 22B | (Inserted later) Declaration of beneficial interest, where someone else holds the real interest in a partner's contribution. |
Chapter VI — Form of Contribution (Rule 23)
| Rule | What it covers |
|---|
| 23 | How contribution is accounted for and valued, especially non-cash contribution such as property. |
Chapter VII — Financial Disclosures (Rules 24–26)
| Rule | What it covers |
|---|
| 24 | Books of account and the Statement of Account & Solvency — Form 8. |
| 25 | Filing the annual return — Form 11. |
| 26 | Inspection of documents held by the Registrar, and getting certified copies. |
Chapter VIII — Destruction of Old Records (Rule 27)
| Rule | What it covers |
|---|
| 27 | How long records must be preserved before the Registrar can destroy them. |
Chapter IX — Investigations (Rules 28–31)
| Rule | What it covers |
|---|
| 28 | The security deposit required when partners themselves apply for an investigation. |
| 29 | The application procedure for an investigation. |
| 30 | The fee for a copy of the inspector's report. |
| 31 | Authentication of the inspector's report. |
Chapter X — Conversion to Limited Liability Partnership (Rules 32–33)
| Rule | What it covers |
|---|
| 32 | The certificate of registration issued when an entity converts into an LLP. |
| 33 | Intimating a partnership firm's conversion to the Registrar of Firms. |
Chapter XI — Foreign Limited Liability Partnership (Rule 34)
| Rule | What it covers |
|---|
| 34 | Filing requirements for a foreign LLP setting up a place of business in India. |
Chapter XII — Compromise, Arrangement or Reconstruction (Rule 35)
| Rule | What it covers |
|---|
| 35 | The application and meeting procedure for a scheme of compromise or arrangement. |
Chapter XIII — Electronic Filing of Documents (Rule 36)
| Rule | What it covers |
|---|
| 36 | The framework for filing documents electronically through MCA21. |
Chapter XIV — Striking Off Name of Defunct LLP (Rule 37)
| Rule | What it covers |
|---|
| 37 | The procedure to strike a defunct LLP off the register — Form 24 in practice, the common voluntary-closure route for an LLP with no operations. |
Chapter XV — Conversion from Firm to Limited Liability Partnership (Rule 38)
| Rule | What it covers |
|---|
| 38 | The procedural detail for converting a partnership firm into an LLP (under Section 55). |
Chapter XVI — Conversion from Private Company to Limited Liability Partnership (Rule 39)
| Rule | What it covers |
|---|
| 39 | The procedural detail for converting a private company into an LLP (under Section 56). |
Chapter XVII — Conversion from Unlisted Public Company to Limited Liability Partnership (Rule 40)
| Rule | What it covers |
|---|
| 40 | The procedural detail for converting an unlisted public company into an LLP (under Section 57). |
Chapter XVIII — Compounding of Offences (Rule 41)
| Rule | What it covers |
|---|
| 41 | The procedure for compounding (settling with a fee) an offence under the Act instead of facing prosecution. |
Frequently asked questions
What is the LLP Act, 2008?
The law that created the Limited Liability Partnership as a business structure in India. It sets out how an LLP is formed, how partners relate to each other and to the LLP, what they are liable for, and how an LLP is wound up. It came into force on 31 March 2009 and was significantly amended by the LLP (Amendment) Act, 2021, effective 1 April 2022.
How many chapters and sections does the LLP Act have?
14 chapters and 81 numbered sections, plus several lettered sections inserted by the 2021 amendment (34A, 67A, 67B, 67C, 68A, 76A, 77A). There are also 4 Schedules covering default partner rights and the three conversion routes into an LLP. The LLP Rules, 2009 — the separate document that fills in the procedural detail — has its own structure: 18 chapters and 41 rules.
What is Rule 37, and how do I close a defunct LLP?
Rule 37 (Chapter XIV of the LLP Rules) sets out the procedure to strike a defunct LLP off the register — Form 24 in practice. It is the common route for an LLP with no operations and no pending liabilities, and is faster and cheaper than a formal winding-up under Sections 63–65 of the Act.
Where is the LLP Agreement address-for-service rule?
Rule 16 of the LLP Rules (Chapter IV) — this is the specific provision partners usually mean when they ask about "Rule 16(2)." It covers the address used for formal service of documents on the LLP.
What is the difference between a Section and a Rule?
A Section is part of the Act itself, passed by Parliament — it creates the legal structure and sets out rights, duties and liabilities. A Rule is delegated legislation made by the Central Government under the rule-making power in Section 79 of the Act — Rules fill in operational detail like which form to file, the fee, and the deadline. A Rule cannot go beyond what its parent Section authorises, and if the two ever conflict, the Act wins.
Has the LLP Act been amended?
Yes. The LLP (Amendment) Act, 2021 — effective 1 April 2022 — was the first change since the Act commenced in 2009. It decriminalised many procedural defaults (replacing criminal prosecution with civil penalties for about a dozen offences), introduced the "Small LLP" category with lighter compliance, and created an in-house adjudicating-officer system for penalties instead of routing every default through court.
What is a "Small LLP"?
An LLP whose capital contribution does not exceed ₹25 lakh and whose turnover in the previous financial year does not exceed ₹40 lakh — both conditions must be met. A Small LLP (and a Start-up LLP) pays a reduced penalty for defaults: half the standard penalty, capped at ₹1,00,000 for the LLP and ₹50,000 for each partner or designated partner.
Does the Indian Partnership Act, 1932 apply to LLPs?
No. Section 4 of the LLP Act expressly excludes the Indian Partnership Act, 1932. An LLP is governed entirely by the LLP Act, the LLP Rules, and its own LLP Agreement — it is legally a body corporate, not a traditional partnership firm.
What happens if an LLP has no written LLP Agreement?
The default rules in the First Schedule to the Act automatically apply — covering profit-sharing (equal shares by default), management rights, and other mutual rights and duties. This is one more reason to have a properly drafted LLP Agreement rather than rely on the default rules, which are rarely what partners actually intend.
Can a partner be personally liable for the LLP’s debts?
Not just for being a partner — that is the core protection in Section 28. A partner’s personal assets stay separate from the LLP’s obligations. The exception is Section 30: if a partner acts with intent to defraud creditors or for any other fraudulent purpose, the limited-liability protection is lifted and personal liability can follow.
Where can I read the official text of the LLP Act and Rules?
The bare Act and Rules are published on the Ministry of Corporate Affairs website (mca.gov.in) and on India Code (indiacode.nic.in), the government’s official legislative repository. This page explains them in plain language — always check the primary source for anything you plan to rely on formally.
Which sections cover partner changes?
Sections 22 to 25 (Chapter IV). Section 22 covers who can become a partner, Section 23 the relationship between partners, Section 24 how someone stops being a partner, and Section 25 the requirement to file every change with the Registrar — in practice, Form 3 and Form 4.
Which section covers winding up an LLP?
Chapter XIII, Sections 63 to 65. An LLP can be wound up voluntarily or by the Tribunal (Section 64 lists the grounds, including inability to pay debts). Separately, a defunct LLP with no operations can be struck off the register administratively under Section 75, without a full winding-up — this is the more common route for a genuinely inactive LLP.
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