Small Company vs Small LLP: Definition and Limits Compared
They are two different tests under two different Acts, and the limits are nowhere near each other. A small company (section 2(85) of the Companies Act, 2013) has paid-up share capital up to ₹10 crore and turnover up to ₹100 crore. A small LLP (section 2(1)(ta) of the LLP Act, 2008) has contribution up to ₹25 lakh and turnover up to ₹40 lakh. An LLP is never a small company, and a company is never a small LLP.
| Small company | Small LLP | |
|---|---|---|
| Governing law | Companies Act, 2013, section 2(85) | LLP Act, 2008, section 2(1)(ta) |
| Capital limit | Paid-up share capital up to ₹10 crore | Contribution up to ₹25 lakh |
| Turnover limit | Up to ₹100 crore, preceding financial year | Up to ₹40 lakh, preceding financial year |
| Both limits needed? | Yes | Yes |
| Current limits since | 1 December 2025 (they were ₹4 crore and ₹40 crore before) | 1 April 2022 — no change found since |
The scale gap is large. The company capital limit is 40 times the LLP capital limit, and the company turnover limit is 250 times the LLP turnover limit.
What each status gets you
A small company gets lighter treatment in several places: no cash flow statement, two board meetings a year instead of four, the abridged MGT-7A annual return, no mandatory auditor rotation, and reduced penalties. The full list, with the section for each, is on our sister site: small company definition.
A small LLP pays less when it files late. Under the late-fee schedule, for example, a filing 15 to 30 days late carries a multiplier of 2 for a small LLP and 4 for any other LLP, and the gap widens as the delay grows. The late-fee calculator applies the right column for you.
Three LLP tests that are easy to confuse
- Small LLP: contribution up to ₹25 lakh and turnover up to ₹40 lakh. It decides which late-fee column applies.
- Audit: an LLP’s accounts are audited where contribution exceeds ₹25 lakh or turnover exceeds ₹40 lakh, as rule 24(8) is normally applied. The figures are the same as the small-LLP limits, but the logic is not. Small status needs both limits to be met. The audit rule is worded as an exemption with “or”, which on a literal reading would exempt an LLP within either limit; professional practice treats crossing either one as triggering an audit, and we advise the same. See LLP audit requirement.
- Form 11 certification: a practising company secretary certifies Form 11 from contribution of ₹50 lakh or turnover of ₹5 crore, as the form reads — a different pair of figures again. See MGT-8 and company secretary for an LLP.
Does it matter when choosing between an LLP and a company?
In one respect, yes. A company’s accounts are audited whatever its size, while an LLP’s are audited only once it crosses the limits above (a Bill pending in Parliament would let the Government exempt some classes of companies from appointing an auditor; it is not law). A very small business therefore carries a lighter audit burden as an LLP. Once turnover passes ₹40 lakh or contribution passes ₹25 lakh, that difference disappears (as the audit rule is normally applied) and the small-LLP late-fee column no longer applies. For the wider comparison see LLP vs private limited company.
Is anything changing?
The LLP Act lets the Central Government raise the small-LLP limits, up to ₹5 crore of contribution and ₹50 crore of turnover. We found no notification doing so since 2022.
On the company side, the Corporate Laws (Amendment) Bill, 2026 would raise the small-company limits to ₹20 crore and ₹200 crore. It was introduced on 23 March 2026, a Joint Parliamentary Committee reported on 3 August 2026, and we found no sign of passage as of 1 October 2026. In the published summaries we read, its LLP Act changes concern IFSC LLPs, conversion of certain trusts, valuers and penalties, not the small-LLP definition.
Frequently asked questions
Is an LLP a small company?
No. A small company is defined under the Companies Act and has to be a company. An LLP has its own small-LLP test under the LLP Act.
What is the limit for a small company now?
Paid-up share capital up to ₹10 crore and turnover up to ₹100 crore, both required, since 1 December 2025. Before that the limits were ₹4 crore and ₹40 crore.
What is the limit for a small LLP?
Contribution up to ₹25 lakh and turnover up to ₹40 lakh — both limits must be met.
Can the small-LLP limits be raised?
Yes, by the Central Government, within the Act’s ceilings of ₹5 crore of contribution and ₹50 crore of turnover. We found no notification doing so.
Is the small-LLP limit the same as the audit limit?
The figures are the same; the tests are not. A small LLP must be within both limits. The audit rule is normally applied as “audit if either limit is crossed”, though its wording can be read as needing both. If your LLP is in the gap, confirm with your auditor.
Position as at 1 October 2026, based on section 2(85) of the Companies Act, 2013 and section 2(1)(ta) of the Limited Liability Partnership Act, 2008. Guidance, not legal advice for your particular entity.