LLP Winding Up | Closure of LLP 100% Easy Online Process & Pan India Service

In the dynamic business landscape of India, Limited Liability Partnerships (LLPs) have gained significant popularity among entrepreneurs and professionals. However, circumstances may arise where the closure of an LLP becomes necessary. This article serves as a comprehensive guide on the closure of LLPs in India, addressing the process, legal requirements, and frequently asked questions. For Further Query Contact our experts here.

Our Package for Striking off an Inactive LLP start @ ₹10,999

Closure of LLP (limited Liability Partnership)

Striking off the name of defunct Limited Liability Partnership (LLP) is the simplest way to close the LLP with no assets and no liabilities. In this method, designated partners are need to first settle the accounts of LLP by selling the assets, if any and pay off the liabilities, if any. Based on nil assets and liabilities and based on no objections from the general public, Registrar will close the LLP. It is pertinent to note that strike off is not the legal end of the LLP just like winding up. Designated partners have to file Indemnity, for security of future liabilities, while making an application for strike off. In case any future liabilities or obligations arise, designated partners are personally liable for that which is not the case of winding up. So it is always advisable to first set off all kinds of liabilities, disputes etc. in order to save oneself from future liabilities.

Legal Requirements for Closure of LLP

The closure of an LLP in India must comply with certain legal requirements, ensuring adherence to the provisions of the Limited Liability Partnership Act, 2008. Key legal requirements for the closure of an LLP include:

Mutual Agreement: The partners must unanimously agree to dissolve the LLP and document the decision through a formal resolution.
Appointment of Liquidator: A liquidator should be appointed to manage the winding up process, ensuring the orderly closure of the LLP’s affairs.
Settlement of Liabilities: All outstanding liabilities, including debts and contractual obligations, must be settled before initiating the closure process.
Compliance with Tax Obligations: The LLP should ensure the completion and filing of all tax-related documents, including final returns and closure of tax registrations.
Filing with RoC: The LLP must file the required documents with the Registrar of Companies, including Form 24, to initiate the formal dissolution process.
Public Notice: The LLP is required to publish a public notice regarding the dissolution in a newspaper to inform stakeholders and interested parties.

Pricing for Striking Off an Inactive LLP (Form 24)

Basic Package

₹10,999/-

Standard Package

₹14,300/-

Note: None of our packs includes Notary Service or the Cost of Stamp Paper. (We will draft the documents, and you have to buy stamp paper from a local stamp vendor and get the affidavits and indemnity bond notarised)

Required Documents for LLP closure

LLP Documents

Certificate of incorporation
LLP Agreement
Pan card
Latest Income Tax Return (if any)
Bank Account Closure Statement / Certificate
Latest Statement of Accounts of LLP

Partners Documents

PAN of Partners
Aadhaar of Partners
Latest Address Proof of Partners – Bank Statement or any Utility bill

Legal Documents

Board of Resolution for LLP Closure
Consent of all partner for closure
statement of account duly certified by CA
Ideminity bond from all partner
Affidavit from all partners
Authorisation letter dully signed by all partner

LLP Closure Process

Step 1: Decision-Making and Partner Consent

The first step in closing an LLP is reaching a mutual decision among the partners. All partners must be in agreement about the closure and document their consent through a formal resolution. This resolution should outline the reasons for the closure and be signed by all partners.

Step 2: Appointment of a Liquidator

After obtaining partner consent, the LLP must appoint a liquidator. The liquidator’s role is crucial in overseeing the winding-up process. They are responsible for collecting and selling the assets, settling liabilities, and distributing the remaining assets to the partners.

Step 3: Settling Outstanding Liabilities

Before initiating the closure process, it is essential to settle all outstanding liabilities of the LLP. This includes paying off debts, taxes, and any contractual obligations. By ensuring the settlement of liabilities, the partners can avoid legal complications and protect their interests.

Step 4: Filing of Form 24

Once the liabilities are settled, the LLP needs to file Form 24 with the Registrar of Companies. Form 24 is a notice of closure and must be accompanied by relevant documents, such as the consent of partners, a statement of assets and liabilities, and a declaration from the liquidator.

Step 5: Public Notice

After filing Form 24, the LLP is required to publish a public notice in a newspaper circulating in the district where the registered office of the LLP is located. The notice must state the LLP’s intention to be dissolved and provide a period of 30 days for objections, if any, from creditors or other interested parties.

Step 6: Winding-Up Process

Following the publication of the public notice, the winding-up process begins. The liquidator takes charge of collecting the remaining assets, settling outstanding claims, and distributing the assets among the partners in accordance with their entitlements. The liquidator must maintain proper books of accounts and complete the winding-up process within a reasonable timeframe.

Step 7: Striking Off the LLP

Once the winding-up process is completed, the liquidator prepares the final accounts and submits them to the RoC. The RoC then strikes off the name of the LLP from the register, officially closing the LLP.

Frequently Asked Questions (FAQs)

Can an LLP be closed without settling its liabilities?

No, it is not advisable to close an LLP without settling its liabilities. Settling the outstanding debts and obligations ensures that the partners and the LLP are not subjected to legal consequences in the future.

What is the role of a liquidator in the closure of an LLP?

A liquidator is responsible for winding up the affairs of the LLP. They collect and sell assets, settle liabilities, and distribute the remaining assets among the partners. The liquidator plays a crucial role in ensuring a smooth and compliant closure process.

What are the consequences of non-compliance with legal requirements for LLP closure?

Non-compliance with legal requirements for LLP closure may lead to penalties, fines, or legal actions against the LLP and its partners. It is essential to adhere to the provisions of the Limited Liability Partnership Act, 2008, and fulfill all obligations to avoid such consequences.

Can an LLP be revived after closure?

Once an LLP is dissolved and its name is struck off from the register, revival becomes a complex and challenging process. It is generally not advisable to seek revival after closure. Therefore, careful consideration and expert guidance are necessary before deciding to dissolve an LLP.

How long does the LLP closure process usually take?

The duration of the LLP closure process depends on various factors, including the complexity of the affairs, settlement of liabilities, and compliance with legal requirements. On average, the closure process can take several months to a year or more.