# Small Limited Liability Partnership [Section 2(1)(ta)]
## Definition
A 'Small LLP' is one that satisfies either the threshold test or prescribed requirements.
### Test 1 — Threshold Test (Both must be met)
Criterion
Threshold
Maximum Prescribable
Contribution
Does not exceed ₹25 lakhs
Up to ₹5 crores
Turnover (as per Statement of Accounts & Solvency of immediately preceding FY)
Does not exceed ₹40 lakhs
Up to ₹50 crores
OR
### Test 2 — Other Prescribed Route
The LLP meets such other prescribed requirements and fulfils prescribed terms & conditions.
## Why the Small LLP Category Matters
Classification as a Small LLP comes with lower compliance burden and reduced penalty exposure — analogous to the 'Small Company' concept under the Companies Act. The category encourages MSME-scale LLPs.
Worked example
### Example 1
Q: Bharat LLP has contribution of ₹20 lakhs and turnover of ₹35 lakhs as per its Statement of Accounts & Solvency for FY 2024-25. Is it a Small LLP?
A: Yes. Both thresholds satisfied — contribution (₹20L ≤ ₹25L) and turnover (₹35L ≤ ₹40L). It qualifies as a Small LLP under Section 2(1)(ta).
### Example 2
Q: ABC LLP has contribution of ₹20 lakhs but turnover of ₹50 lakhs in immediately preceding FY. Is it a Small LLP?
A: No. Both conditions must be met. Turnover exceeds ₹40 lakhs threshold. Unless the CG has prescribed a higher turnover threshold (up to ₹50 cr permissible) covering this level, ABC LLP is not a Small LLP.
⚠️ Common exam mistakes
Treating contribution OR turnover as alternative tests — both must be satisfied in Test 1.
Confusing the statutory base thresholds (₹25L, ₹40L) with the maximum the CG can prescribe (₹5 cr, ₹50 cr).
Using current year turnover — Section requires turnover of the immediately preceding FY as per Statement of Accounts & Solvency.
Bare-Act text Section 2(1)(ta) · The Limited Liability Partnership Act, 2008 · click to expand
Section 2(1)(ta) - 'small limited liability partnership' means a limited liability partnership — (i) the contribution of which does not exceed twenty-five lakh rupees or such higher amount, not exceeding five crore rupees, as may be prescribed; and (ii) the turnover of which, as per the Statement of Accounts and Solvency for the immediately preceding financial year, does not exceed forty lakh rupees or such higher amount, not exceeding fifty crore rupees, as may be prescribed; or which meets such other requirements as may be prescribed, and fulfils such terms and conditions as may be prescribed.