diff --git a/src/backend/core/recording/services/__init__.py b/src/backend/core/recording/services/__init__.py
new file mode 100644
index 00000000..e69de29b
diff --git a/src/backend/core/recording/services/recording_events.py b/src/backend/core/recording/services/recording_events.py
new file mode 100644
index 00000000..f24a7b02
--- /dev/null
+++ b/src/backend/core/recording/services/recording_events.py
@@ -0,0 +1,49 @@
+"""Recording-related LiveKit Events Service"""
+
+from logging import getLogger
+
+from core import models, utils
+
+logger = getLogger(__name__)
+
+
+class RecordingEventsError(Exception):
+    """Recording event handling fails."""
+
+
+class RecordingEventsService:
+    """Handles recording-related Livekit webhook events."""
+
+    @staticmethod
+    def handle_limit_reached(recording):
+        """Stop recording and notify participants when limit is reached."""
+
+        recording.status = models.RecordingStatusChoices.STOPPED
+        recording.save()
+
+        notification_mapping = {
+            models.RecordingModeChoices.SCREEN_RECORDING: "screenRecordingLimitReached",
+            models.RecordingModeChoices.TRANSCRIPT: "transcriptionLimitReached",
+        }
+
+        notification_type = notification_mapping.get(recording.mode)
+        if not notification_type:
+            return
+
+        try:
+            utils.notify_participants(
+                room_name=str(recording.room.id),
+                notification_data={"type": notification_type},
+            )
+        except utils.NotificationError as e:
+            logger.exception(
+                "Failed to notify participants about recording limit reached: "
+                "room=%s, recording_id=%s, mode=%s",
+                recording.room.id,
+                recording.id,
+                recording.mode,
+            )
+            raise RecordingEventsError(
+                f"Failed to notify participants in room '{recording.room.id}' about "
+                f"recording limit reached (recording_id={recording.id})"
+            ) from e
diff --git a/src/backend/core/tests/recording/service/__init__.py b/src/backend/core/tests/recording/service/__init__.py
new file mode 100644
index 00000000..e69de29b
diff --git a/src/backend/core/tests/recording/service/test_recording_events.py b/src/backend/core/tests/recording/service/test_recording_events.py
new file mode 100644
index 00000000..408f7f70
--- /dev/null
+++ b/src/backend/core/tests/recording/service/test_recording_events.py
@@ -0,0 +1,72 @@
+"""
+Test RecordingEventsService service.
+"""
+
+# pylint: disable=W0621
+
+from unittest import mock
+
+import pytest
+
+from core.factories import RecordingFactory
+from core.recording.services.recording_events import (
+    RecordingEventsError,
+    RecordingEventsService,
+)
+from core.utils import NotificationError
+
+pytestmark = pytest.mark.django_db
+
+
+@pytest.fixture
+def service():
+    """Initialize RecordingEventsService."""
+    return RecordingEventsService()
+
+
+@pytest.mark.parametrize(
+    ("mode", "notification_type"),
+    (
+        ("screen_recording", "screenRecordingLimitReached"),
+        ("transcript", "transcriptionLimitReached"),
+    ),
+)
+@mock.patch("core.utils.notify_participants")
+def test_handle_limit_reached_success(mock_notify, mode, notification_type, service):
+    """Test handle_limit_reached stops recording and notifies participants."""
+
+    recording = RecordingFactory(status="active", mode=mode)
+    service.handle_limit_reached(recording)
+
+    assert recording.status == "stopped"
+    mock_notify.assert_called_once_with(
+        room_name=str(recording.room.id), notification_data={"type": notification_type}
+    )
+
+
+@pytest.mark.parametrize(
+    ("mode", "notification_type"),
+    (
+        ("screen_recording", "screenRecordingLimitReached"),
+        ("transcript", "transcriptionLimitReached"),
+    ),
+)
+@mock.patch("core.utils.notify_participants")
+def test_handle_limit_reached_error(mock_notify, mode, notification_type, service):
+    """Test handle_limit_reached raises RecordingEventsError when notification fails."""
+
+    mock_notify.side_effect = NotificationError("Error notifying")
+
+    recording = RecordingFactory(status="active", mode=mode)
+
+    with pytest.raises(
+        RecordingEventsError,
+        match=r"Failed to notify participants in room '.+' "
+        r"about recording limit reached \(recording_id=.+\)",
+    ):
+        service.handle_limit_reached(recording)
+
+    assert recording.status == "stopped"
+    mock_notify.assert_called_once_with(
+        room_name=str(recording.room.id), notification_data={"type": notification_type}
+    )