Chapter III - Incorporation of Limited Liability Partnership and Matters Incidental Thereto
Section 20
Section 20: Penalty for improper use of words “limited liability partnership” or “LLP”
A person carrying on business under a name ending in “Limited Liability Partnership”, “LLP”, or a contraction or imitation of those words must be duly incorporated as an LLP. Otherwise section 20 provides a fine.
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Need advice on Section 20?
This article is for general information. Refer to the Limited Liability Partnership Act, 2008 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
If any person or persons carry on business under any name or title of which the words "Limited Liability Partnership" or "LLP" or any contraction or imitation thereof is or are the last word or words, that person or each of those persons shall, unless duly incorporated as limited liability partnership, be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.
Key takeaways
Business under the name
The provision targets carrying on business under a name with the LLP-style ending.
Each person
Where several people do so, the wording applies to that person or each of those persons.
Fine range
The fine is at least ₹50,000 and may extend to ₹5 lakh.
Check the actual business name
Section 20 refers to the last word or words of a name or title used to carry on business, including contractions or imitations of the protected ending.
Verify incorporation
Keep the section 12 certificate and current register details as evidence that the business is duly incorporated as an LLP.
Assess each operator and the statutory range
For an unincorporated business using the protected ending, the section addresses each person carrying on business under that name and specifies the fine range.
Practical preparation
Review these points for the specific transaction or filing.
- Check whether the business name ends with “Limited Liability Partnership”, “LLP” or a contraction or imitation.
- Confirm the business is duly incorporated as an LLP before using that ending.
- Identify every person carrying on the business under the name.
- Assess the statutory ₹50,000 to ₹5 lakh fine if the designation was used without incorporation.
Practical checklist
Do
- Verify LLP incorporation before adopting an LLP suffix in trading materials.
- Use the exact registered entity name on commercial documents.
Avoid
- Do not use “LLP” to imply incorporated status before registration.
- Do not describe section 20 as a daily administrative penalty; it specifies a fine range.
Illustrative example
Hypothetical: unincorporated business using LLP
Two people operate a business under the name Ivy LLP without incorporating an LLP.
Check activity
Confirm they are carrying on business under the LLP-style name.
Check status
Verify whether the business has been duly incorporated as an LLP.
Assess exposure
Identify each person covered by section 20 and the statutory fine range.
Outcome
- If they are not duly incorporated, each person carrying on business under that name may face the fine prescribed by section 20.
Glossary
- Improper use
- Carrying on business under an LLP-style ending without due LLP incorporation.
- Imitation
- A name ending that imitates the protected LLP words or acronym within section 20.
Frequently asked questions
Can an unincorporated firm trade with “LLP” at the end of its name?
Section 20 makes a person carrying on business under such a name punishable unless duly incorporated as an LLP.
What is the section 20 fine?
At least ₹50,000 and up to ₹5 lakh for the person concerned.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026