What is the meaning of Closure of LLP?

As an LLP is a creation of law, it can be closed by procedures laid down under LLP Act, 2008 and rules made thereunder. In case the LLP does not have liabilities or debts to pay it can be closed voluntarily by a unanimous decision of all the partners of the LLP and after that, an application can be filed with the registrar to strike down the name of LLP from its register

Reason for Closure of LLP:

In case the LLP wants to close down its business it can make an application to the Registrar of Companies for declaring the LLP as defunct and removing the name of the LLP from its register of LLP as per the procedure laid down in sub rule 1 of Rule 37 of LLP Rules 2008 on either of following grounds:

  • If the LLP has been inoperative from its incorporation or;
  • If the LLP is not carrying on any business operations for the period of one year or more.
STEPS

Steps involved for LLP Closure:

Step-1 Obtain written consent of all the partners of the LLP

A unanimous decision of all the partners of the LLP to be taken by way of written consent for closure of LLP.

Step-2 Preparation of Statement of Accounts

Preparation of Statement of Accounts disclosing nil assets and nil liabilities, certified by a Chartered Accountant in practice made up to a date not earlier than thirty days of the date of filing of Form 24.

Step-3 Preparation of Affidavits and Indemnity Bonds

The next step is to take affidavit and Indemnity Bond from the designated partners of the LLP

Step-4 Filing of Application with RoC

The next step is to file Application to strike off the name of the LLP along with all requisite attachments i.e. Statement Account, an affidavit signed by the designated partners, copy of detailed application, copy of authority to make application, Copy of acknowledgement of latest Income tax return with RoC in Form-24.

Step-5 Approval and publication in official gazette

The application will be processed under approval route and take at least six months unless any objection is raised by concerned ROC. Once the form is approved by ROC same will be made available at MCA site and publish in the official gazette and from the date of publication it will stand dissolved.

Documents

Documents Required for LLP Closure:

  • List of Partners and Designated Partners.
  • Copy of signed statement of accounts.
  • Copy of Company’s Bank Statements.
  • Id and Address proof copies of Partners and Designated Partners.
  • LLP Agreement.
  • Digital Signature (DSC) of anyone Designated Partner of the LLP.