Closure of Limited Liability Partnership

In case the Limited Liability Partnership (LLP) wants to close down its business or where it is not carrying on any business operations for the period of one year or more, , it can make an application to the Registrar of Companies for declaring the company as defunct and removing the name of the LLP from its register of LLP’s. The procedure is given below: (clause (b) of sub rule 1 of Rule 37 of LLP Rules 2008)

An application is required to be made in e-Form 24 to the Registrar of Companies for Striking off the name of the LLP under clause (b) of sub rule 1 of Rule 37 of LLP Rules 2008 with the consent of all partners.

The Registrar shall publish a notice on its website as to the content of the application for a period of one month for the notice of the general public.

Application submitted to be supported by Indemnity Bonds to indemnify any person legally claiming after the LLP to be strike off and duly sworn Affidavits declaring all the information provided and statements given to be true, from all partners.

Application filed also to be supported by approvals or No Objection Certificates from concerned Regulatory Authorities with which the LLP is registered. For eg. LLP engaged in or registered with RBI for Banking Business has to obtain NOC from RBI before winding up of its affairs.

The Registrar, where he has sufficient cause to believe that the limited liability partnership has any asset or liability, satisfy himself that sufficient provision has been made for the realization of all amount due to the limited liability partnership and for the payment or discharge of its liabilities and obligations by the limited liability partnership within a reasonable time and, if necessary, obtain necessary undertakings from the designated partner or partner or other persons in charge of the management of the limited liability partnership.

On the expiry of period of one month, the Registrar may, by an order, unless cause to the contrary is shown by the limited liability partnership, strike its name off the register, and shall publish notice thereof in the Official Gazette, and on the publication in the Official Gazette of this notice, the limited liability partnership shall stand dissolved.

Documents

File e-form 24 with following documents:

Copy of Detailed Application – Mention full details of LLP plus reasons for closure

Copy of Authority to Make the Application – The person who is making application must be authorized by all the partners to make such application.

Copy of Consent of all Partners – Self-Explanatory.

Copy of Consent of all Creditors– if no creditor than Certify that that LLP have NIL Creditor.

Copy of the undertaking/ indemnity bond for striking off name Indemnity bond.

Copy of statement of assets and liabilities duly certified as true and correct by auditor/chartered accountant in practice.

Copy of acknowledgement of latest Income tax return- Self Explanatory LLP older less than a year cannot be strike off.

Winding Up by Tribunal

Winding up of LLP can be initiated by a Tribunal for the following reasons:

The LLP wants to be wound up.

There are less than two Partners in the LLP for a period of more than 6 months..

The LLP is not in a position to pay its debts.

The LLP has acted against the interests of the sovereignty and integrity of India, the security of State or public order.

The LLP has not filed with the Registrar Statement of Accounts and Solvency or LLP Annual Returns for any five consecutive financial years

The Tribunal is of the opinion that it is just and equitable that the LLP should be wound up.

Main Advantages of Registering a Close a Limited Liability Partnership

An LLP can apply for strike-off where it has not indulged into any business transaction since it incorporation.

If the LLP is non-operative for more than one year, is can proceed for closure LLP through striking off.

When bank account in the name of LLP is not opened. In case the account was subscribed, a declaration to be made after closure of same.

There is no Assets or Liabilities in books of Limited Liability Partnership.

The LLP has complied with all Annual Compliance requirements for the financial years in which business is carried on.

Filing of ITR is completed for the concerned period in which financial transactions are undertaken.