# LLP Act, 2008 — Key Definitions [Section 2(1)]

## (a) Address — relating to a partner

Individual partner: his usual residential address.
Body corporate partner: address of its registered office.

## (d) Body Corporate

Includes	Excludes
Company (under Companies Act)	Corporation Sole
LLP registered under this Act	Co-operative Society
LLP incorporated outside India	Any other body corporate notified by CG
Company incorporated outside India

## (e) Business

Includes every trade, profession, service and occupation, except any activity which the CG may, by notification, exclude.

## (l) Financial Year

Period from 1 April of a year to 31 March of the following year.
Exception: If LLP is incorporated after 30 September, FY may end on 31 March of the next-following year.

Example: LLP incorporated on 15-Oct-2024 → FY runs from 15-Oct-2024 to 31-Mar-2026.

## (m) Foreign LLP

An LLP formed, incorporated or registered outside India which establishes a place of business within India.

## (o) LLP Agreement

Any written agreement:

Between partners of the LLP, or
Between the LLP and its partners

Which determines the mutual rights and duties of the partners and their rights & duties in relation to the LLP.

## (ta) Small LLP

An LLP that satisfies all of the following:

1. Contribution ≤ ₹25 lakh (or such higher amount as may be prescribed, not exceeding ₹5 crore); AND

2. Turnover (as per Statement of Accounts & Solvency) ≤ ₹40 lakh (or higher prescribed amount, not exceeding ₹50 crore); AND

3. Meets such other terms as may be prescribed.

## Section 4 — Non-applicability of Indian Partnership Act, 1932

Save as otherwise provided, the Indian Partnership Act, 1932 shall NOT apply to LLPs.

Worked example

### Example 1

Q. An LLP was incorporated on 1 November 2024. What is its first financial year?

A. Since it was incorporated after 30 September, the LLP may choose its first FY to end on 31 March 2026 (i.e. 01-Nov-2024 to 31-Mar-2026). [Sec 2(1)(l)]

### Example 2

Q. Alpha LLP has contribution of ₹20 lakh and turnover of ₹45 lakh. Is it a Small LLP?

A. No. Although contribution (₹20L) is within the ₹25L threshold, turnover (₹45L) exceeds the ₹40L threshold. Both conditions must be satisfied. [Sec 2(1)(ta)]

### Example 3

Q. Can a Co-operative Society become a partner in an LLP?

A. Only a Body Corporate (or individual) can be a partner. A Co-operative Society is specifically excluded from the definition of BC under Sec 2(1)(d), so it cannot become a partner in an LLP.

⚠️ Common exam mistakes

Including Corporation Sole / Co-operative Society as Body Corporate — both are excluded by Sec 2(1)(d).
Forgetting the 30 September cut-off for the first FY of a newly incorporated LLP.
Treating the Small LLP test as 'OR' instead of 'AND' — both contribution and turnover conditions must be met.
Forgetting that the LLP Agreement must be written — oral agreements are not LLP Agreements within Sec 2(1)(o).

Bare-Act text Sections 2 & 4 · Limited Liability Partnership Act, 2008 · click to expand

Section 2(1)(o): 'limited liability partnership agreement' means any written agreement between the partners of the limited liability partnership or between the limited liability partnership and its partners which determines the mutual rights and duties of the partners and their rights and duties in relation to that limited liability partnership. Section 4: Save as otherwise provided, the provisions of the Indian Partnership Act, 1932 shall not apply to a limited liability partnership.

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Key definitions — Sec 2(1)

Worked example

⚠️ Common exam mistakes