Close a Limited Liability Partnership

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Reasons for dissolution of LLP in India

To avoid compliance and filing responsibilities for the LLP’s which are not active.

The statutory compliances of maintaining an LLP are higher than the cost of winding up. If the LLP is dormant it’s better to wind up than fulfill the compliances.

To avoid fines and penalty for late filing, it is better to officially Wind Up LLP’s which are inactive.

All LLPs registered in India have to file the annual returns and statement of accounts for each Financial Year irrespective of annual revenue or profit disregard of its working. LLP that hasn’t opened a bank account or commenced business activity would have to file the following filings each year to maintain LLP compliance and avoid penalty.

Closure of a Limited Liability Partnership

Since an LLP is a distinct legal entity that must be established through legal channels, there is a suitable legal process that must be followed when it comes to terminating the LLP.

An LLP may be wound up or have its name removed from the Register of LLPs in order to close. For many LLPs, the winding-up process may be expensive or time-consuming because it necessitates tribunal approval and the participation of liquidators. As a result, the LLP that has not been in operation since it was formed or for more than a year may choose the simple exit route, known as strike-off. After the Ministry publishes the notice, the LLP will be deemed invalid. The LLP ceases to exist in the eyes of the law once it is struck off.

Documents Required

List of Documents that are required to proceed with this service package are

PAN Card

All partners are required to submit their and the firm’s PAN number as identity proof.

LLP Agreement

LLP Agreement along with any modifications made therein

NOC from Creditors

NoC for strike-off to be obtained from secured creditors, if any

Address Proof of firm

If the registered office place is rented, rent agreement and one utility bill (electricity bill, water bill, property tax bill, gas receipt etc.) have to be submitted. Also, NOC from landlord will be submitted.

Accounting Information

The financial statement of the LLP with Copy of acknowledgment of latest INCOME TAX RETURN

LLP certified

Statement of assets and liabilities of the LLP certified as true and correct by auditor/chartered accountant in practice.

Pre-Requisites for LLP strike off

Non-operative Stage

The LLP must discontinue its operations for a minimum period of 1 year

Fully Complied

The LLP must be fully complied with Annual Compliance requirement and more

Closure of Bank Account

The LLP must close all the bank accounts opened in the name of the LLP

Frequently Asked Questions

What is the procedure of LLP Strike-off?

The procedure to dissolve LLP is :
1)The applicant needs to file online LLP form 24 with MCA, with the required documents.
2)NOC has to be obtained from the regulatory authority governing the LLP e.g. SEBI or RBI.
3)The registrar shall publish the content of the application filed by the LLP on its website for a period of One Month for information to the general public and receive the representation on the same.
4)Upon expiry of the period specified above, where no reply or representation is received, the Registrar on satisfying himself for sufficient cause for the closure of the LLP may pass an order to strike-off the name of the LLP from the Register of the Limited Liability Partnership.

What is the procedure for closure of LLP in India through mode of striking off?

The procedure of striking off requires the filing of the prescribed form along with the documents as listed in the next FAQ. The Registrar shall further file publish the application of striking off on the website of MCA for a period of 1 month for receiving any representation from the general public. The application once approved will affect the change of status of LLP as “Stuck off (defunct)” in the register and master data of LLP.

How can I proceed for closure of the business under the name of LLP?

The business carried under Limited Liability Partnership organization can be closed at the will of Partners by any of the following ways:
Declare LLP as defunct; or
Voluntary winding-up of the LLP; or
Compulsory winding-up of the LLP (initiated by Tribunal)

What is the easiest way of closure of LLP in India?

The name of Limited Liability Partnership can be applied for strike off by way of declaring it as defunct for a period of one year or more. This is the easiest way to close the LLP as there is no involvement or requirement of the Liquidator or Tribunal. To choose this mode, few conditions are required to be fulfilled (prescribed below).

Which LLP can make an application to strike off its name from Register of Companies (LLP)?

The LLP which has not commenced any business under its name since its incorporation or the LLP which has ceased to operate can make an application under this route. In both cases, a period of one year shall be passed since the incorporation.

whether a Liquidator is required to be appointed for this procedure?

No, the appointment of a liquidator or an application before Tribunal is not required to be made. The appointment of a liquidator is applicable in case of Dissolution of the LLP through voluntary or compulsory winding up only.

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Close a Limited Liability Partnership