Closure of LLP

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Closure of LLP

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CHECKLIST OF DOCUMENTS REQUIRED FOR CLOSURE OF LIMITED LIABILITY PARTNERSHIP FIRM

  1. Indemnity bond.

  2. ITR acknowledgement of LLP.

  3. Statement of Profit and Loss. 

  4. Affidavit.

  5. Authorization letter for striking of LLP.

PREREQUISITE

  1. LLP closure must be filed to the ROC at least completion of one year from the date of incorporation.

  2. Annual returns of the LLP must be filed before proceeding for the closure of LLP.

  3. Bank account of the LLP must be closed.

  4. There should be no creditors, otherwise NOC from the creditors is required

  5. There must be no business in the LLP

PROCESS FOR CLOSURE OF LIMITED LIABILITY PARTNERSHIP FIRM

  1. On completion of documents mentioned in the prerequisite, then affidavit and declaration to be prepared.

  2. Statement of accounts disclosing NIL assets and liabilities, certified by the practicing Chartered Accountant up to a date not earlier than thirty days of the date of filing of Form 24 must be obtained.

  3. Filing of LLP Form 24 with the MCA to strike off name of LLP

TIME TAKEN FOR CLOSURE OF LIMITED LIABILITY PARTNERSHIP FIRM

The whole process will require approximately ten day to file Form - 24 and approval depends upon the department.

OVERVIEW

Defunct limited liability partnership carrying no business have the option to approach the registrar to strike off the name of the LLP in accordance with Section-75 of Limited Liability Partnership Act, 2008 read with Limited Liability Partnership (Amendment) Rules, 2017. It is better to move for closure of the LLP if there is no business to save the penalty cost that may arise due to non-compliance of annual return i.e. Form - 8 and Form - 11.

Closure of limited liability partnership [LLP]

Every legally registered business must windup it a company in a legal way.  So, in this article let’s see about the winding up of LLP.

What is the Meaning of Limited Liability Partnership

LLP is a body corporate where the liability of members is limited up to their contribution and the functioning is flexible in nature. It is the hybrid of both company and partnership.Winding up your LLP firm has its own procedure. The detailed information is given below.

Eligibility for closure of Limited Liability Partnership

The LLP must fulfill these conditions before applying for closure,

  1. The activities of LLP must be closed for at least 1 year or from the date of incorporation.
  2. The LLP should not have any assets at the time of application.

So these are the condition to be fulfilled by LLP for closing the firm

Documents Required for Closure of Limited Liability Partnership

  • LLP agreement at the time of incorporation
  • Application regarding the closure of LLP.
  • Affidavit duly signed by the individual or all the partners.
  • Assets and liabilities statement showing nil which should be certified by any practicing chartered accountant.
  • Acknowledgment copy of latest income tax return.
  • Pan card of partners.
  • Address proof of partners.
  • Aadhar card of partners.
  • Consent letter from partners.

So these are the documents that should be prepared for apply LLP closure.

What is the Process of Clousure of Limited Liability Partnership

  • The first step is to pass a special resolution by all or ¾th of the partners of the firm for dissolution.
  • Then you must file form 1 with the MCA along with the resolution copy and the firm should settle debts if any within 1 year from the date of declaring closure and declare itself that there is no debt by at least 2 members.
  • After that form 4 should be submitted with the required documents within 15 days after filing the form.
  • The firm should obtain consent from at least 2/3rd of the company’s creditors.
  • After that, if there are any assets or liabilities, a liquidator will be appointed for liquidation by filing form 6 within 14 after receiving consent.Form 24 should be filed for closure of LLP with DSC of partners and it should be certified by any CA or CS or CMA.
  • And the last step is to file form 9 containing a statement of final accounts and submit it to the registrar of companies.
  • After that, you must close your LLP’s bank account and obtain a closure certificate from the bank.

So this is how you close your limited liability partnership firm


What is the Different methods to close your LLP

  • LLP can be closed for many reasons such as non-functioning, inactive, conflicts between partners, etc.
  • So if the LLP is in-active from the date of incorporation or for at least 1 year then you can defunct by applying for form 24 with the ministry of corporate affairs for closure of LLP.
  • Or if the partners decide to voluntarily wind up the LLP then it can be made by passing a special resolution and clearing off any debts by the appointed liquidator from NCLT and then NCLT will declare the closure of LLP.
  • When the LLP becomes insolvent, the creditors can apply for winding up to NCLT and they start the process by appointing a liquidator for clearing debts as much as can. After that, the LLP will be winded up.

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