Closure of LLP in India Procedure Documents and filing of LLP Form 24

When a Limited Liability Partnership (LLP) decides to close its business or has been inactive for at least one year, it can apply to the MCA subject to the approval of CPACE to be declared defunct and have its name removed from the register of LLPs.
A Limited Liability Partnership (LLP) offers partners limited liability and operates under private agreements, much like a company but with higher income tax rates. When an LLP faces challenges such as non-operation, financial losses, increased debts, partner disputes, or the loss of key management, closing or winding up becomes necessary. However, unlike its relatively straightforward registration process, closing an LLP requires adherence to specific statutory procedures established under the LLP Act 2008.
The Ministry of Corporate Affairs recently amended the Limited Liability Partnership Rules 2009, introducing the Limited Liability Partnership (Amendment Rules) 2017. This amendment streamlined the process with the introduction of LLP Form 24, facilitating the closure of LLPs by applying to the registrar to strike off its name. This article explores the essential steps involved in closing an LLP through the filing of Form 24, ensuring a clear and compliant dissolution process.

Modes of Winding Up an LLP

There are two modes of winding up an LLP as per the LLP Act, 2008:

1. Voluntary Winding Up: Partners of the LLP can mutually decide to wind up the LLP by passing a
resolution and filing the copy with the registrar.
2. Compulsory Winding Up: The Tribunal may order compulsory winding up if:
o The LLP decides to be wound up by the Tribunal.
o The number of partners is reduced below two for more than six months.
o The LLP is unable to pay its debts.
o The LLP has acted against the interests of the sovereignty and integrity of India, the security of
the State, or public order.
o The LLP has defaulted in filing the Statement of Account and Solvency or annual return for five
consecutive financial years.
o The Tribunal finds it just and equitable to wind up the LLP.
Procedure for Voluntary Winding Up

Step 1: Filing of Application to ROC in LLP Form 24

An application must be filed in Form-24 to the concerned Registrar with the consent of all partners, along with the following documents:
• Detailed application.
• Authority to make the application.
• Consent of all partners.
• Approvals or NOC from concerned regulatory authorities.
• Statement of assets and liabilities certified by an auditor/chartered accountant.
• Latest income tax return acknowledgment.
• Evidence of closure of the bank account.
• Indemnity Bonds and sworn Affidavits from all partners.
• Any other optional information.

Step 2: Publication of Notice
The Registrar will publish a notice on the official website for one month to notify the general public.

Step 3: Strike Off of LLP
After one month, if no objections are raised, the Registrar may strike the LLP's name off the register and publish a notice in the Official Gazette, thereby dissolving the LLP.
Conditions for Filing Form 24
• The LLP must have ceased commercial activities for at least one year or never commenced
business.
• The LLP's bank account must be closed, and a closure letter obtained.
• Consent of all partners and creditors must be obtained.
• An affidavit stating the LLP has ceased commercial activities for at least one year or never
commenced business.
• All pending returns in Form 8 and Form 11 must be filed.
Documents Required for Closure of LLP
• PAN card of LLP.
• LLP Agreement.
• Latest income tax return acknowledgment (ITR nil return is must for one year).
• Closure of bank account statement/certificate.
• Latest statement of accounts of LLP.
• PAN & Aadhar card of partners.
• Latest address proof of all partners.
• DSC of the designated partner.

By following these steps and ensuring all conditions and documents are in place, an LLP can efficiently wind up its operations and get its name struck off the register.

Closure of a Limited Liability Partnership (LLP) demands meticulous adherence to legal procedures and regulatory compliance. Compliance Calendar LLP stands ready to guide LLPs through every step of the closure process, ensuring all statutory requirements are met with precision. From initial consultation to the final dissolution and publication, their expertise ensures a smooth and efficient closure, allowing LLP partners to conclude their business affairs with confidence. For LLPs seeking a reliable partner in closure, Compliance Calendar LLP offers invaluable support, making the transition from operational entity to dissolved status as seamless as possible.