JEET LLP is a small scale consulting firm. For the financial year 2024-25, the firm reported a total contribution of 20 lakh and an annual turnover…

CA Intermediate · Corporate and Other Laws · RTP · May 2025
JEET LLP is a small scale consulting firm. For the financial year 2024-25, the firm reported a total contribution of 20 lakh and an annual turnover of 35 lakh as per its Statement of Accounts and Solvency. The LLP intends to avail benefits granted to small LLPs under the Limited Liability Partnership Act, 2008. Based on the given financial details, determine whether JEET LLP qualifies as a "Small LLP" under the LLP Act, 2008.If JEET LLP plans to expand its business and projects and resulting turnover exceeding 50 crore in the next financial year, determine the legal position as to the nature of the LLP as a “Small LLP”.

Suggested Answer and Working Notes:

According to section 2 (1) (ta) of the LLP Act, 2008, a LLP is classified as a "Small LLP" if: Its contribution does not exceed 25lakh (or a higher prescribed amount, up to 5 crore). Here, contribution of JEET LLP is 20lakh, which is within the limit.Its turnover does not exceed 40lakh (or a higher prescribed amount, up to 50 crore). Here turnover of JEET LLP is 35lakh, which is within the limit.) Since JEET LLP meets both conditions, it qualifies as a "Small LLP" under the Act. If JEET LLP's turnover exceeds 50crore in the next financial year, it will no longer meet the requirements as a Small LLP and will be subject to full compliance requirements applicable to regular LLPs.

Topics: The Limited Liability Partnership Act, 2008

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