Punishment for Contravention of Sections 7 and 9 (Section 10)
# Penalty Structure under Section 10
Three separate scenarios, each with its own penalty matrix:
## (1) Contravention of Section 7(1) — DP shortfall / no resident DP
(Less than 2 DPs OR no resident-in-India DP)
Party
Initial Penalty
Continuing Default
Maximum
LLP
₹10,000
₹100/day
₹1,00,000
Every Partner
₹10,000
₹100/day
₹50,000
## (2) Contravention of Section 7(4) — Failure to file consent within 30 days
Party
Initial Penalty
Continuing Default
Maximum
LLP
₹5,000
₹100/day
₹50,000
Every Designated Partner
₹5,000
₹100/day
₹25,000
## (3) Contravention of Section 7(5) or Section 9 — Eligibility / vacancy not filled
Party
Initial Penalty
Continuing Default
Maximum
LLP
₹10,000
₹100/day
₹1,00,000
Every Partner
₹10,000
₹100/day
₹50,000
## Recall Trick — "10-5-10"
Sec 7(1) → ₹10k
Sec 7(4) → ₹5k (smaller default, smaller penalty)
Sec 7(5)/9 → ₹10k
Continuing penalty is always ₹100/day, only the maximum changes (LLP cap = 2× partner cap in each scenario).
Worked example
### Example 1
Q. XYZ LLP failed to file the consent of a newly-appointed DP for 600 days. Compute maximum penalty.
A. Sec 7(4) contravention. LLP: ₹5,000 + (₹100 × 600 = ₹60,000) = ₹65,000, but capped at ₹50,000. Every DP: ₹5,000 + ₹60,000 = ₹65,000, capped at ₹25,000.
### Example 2
Q. An LLP had only 1 designated partner for 200 days. Calculate the penalty.
A. Sec 7(1) contravention. LLP: ₹10,000 + (₹100 × 200) = ₹30,000 (well within ₹1,00,000 cap). Every Partner: ₹10,000 + ₹20,000 = ₹30,000 (within ₹50,000 cap).
⚠️ Common exam mistakes
Mixing up the penalty for Section 7(4) (₹5,000 base, applies to DPs only) with Section 7(1) and 7(5)/9 (₹10,000 base, applies to all partners).
Forgetting that maximum caps differ between the LLP and the individual partners (LLP cap is always double).
Treating these as fines — they are civil penalties imposed by Adjudicating Officer, not criminal fines.
Bare-Act text Section 10 · Limited Liability Partnership Act, 2008 · click to expand
Section 10 — (1) Contravention of Sec 7(1): LLP and every partner liable to penalty of ₹10,000 + ₹100/day continuing, max ₹1,00,000 for LLP and ₹50,000 for every partner. (2) Contravention of Sec 7(4): LLP and every DP liable to penalty of ₹5,000 + ₹100/day, max ₹50,000 for LLP and ₹25,000 for every DP. (3) Contravention of Sec 7(5) or Sec 9: LLP and every partner liable to penalty of ₹10,000 + ₹100/day, max ₹1,00,000 for LLP and ₹50,000 for every partner.