CLOSURE OF LLP COMPANY
CLOSURE OF LLP
A business may be required to be closed due to various reasons like losses, dispute between partners etc.
A Limited Liability Partnership (LLP) requires to file Annual Return (Form 11), Statement of Account & Solvency (Form 8) & Income Tax Return every year. Failing to maintain compliance for a LLP could result in fines and/or disqualification of the Partners from incorporating another Company/LLP. Therefore, if a LLP has become inactive and there are no transactions in the LLP, then it is best to close the LLP.
The Ministry of Corporate Affairs has recently introduced the Form 24 and it is now possible to easily close a LLP by making an application to the Registrar for striking off name of LLP.
The entire process of striking off a LLP can be completed within 3 to 6 months, subject to government processing times.
STEPWISE PROCESS FOR CLOSURE OF LLP
CEASE COMMERCIAL ACTIVITY
A strike off of an LLP can be done if LLP has never commenced business or have ceased commercial activity. Hence, if the LLP is operational and the promoters wish to close the LLP, the LLP must first cease all commercial activity.
CLOSE BANK ACCOUNT(S)
A strike off of an LLP can be done for those LLP that have no creditors and no open bank account. Hence, prior to filing LLP Form 24, any bank account opened in the name of the LLP must be closed and a letter evidencing closure of the bank account in the name of the LLP must be obtained from the Bank.
CONSENT OF PARTNERS
The LLP must pass a resolution to wind up the LLP with approval of at least three-fourths of the total number of Partners.
PREPARE AFFIDAVITS & DECLARATION
All the Designated Partners of the LLP must execute an affidavit, either jointly or severally to the effect that
The Limited Liability Partnership has not commenced business or where it commenced business, it ceased to carry on such business.
The limited liability partnership has no liabilities and indemnifying any liability that may arise even after striking off its name from the Register.
The Limited Liability Partnership has not opened any Bank Account and where it had opened, the said bank account has since been closed together with certificate(s) or statement from the respective bank demonstrating closure of Bank Account.
The Limited Liability Partnership has not filed any Income-tax return where it has not carried on any business since its incorporation, if applicable.
FILLING OF OVERDUE RETURNS
After incorporation of a LLP, the LLP agreement must be filed with the MCA within 30 days of registration. In case this compliance was missed and LLP agreement was not filed, then the initial LLP agreement, if entered into and not filed, along with any amendments must be filed.
A Limited Liability Partnership (LLP) requires to file any overdue Annual Return (Form 11), Statement of Account & Solvency (Form 8) up to the end of the financial year in which the limited liability partnership ceased to carry on its business or commercial operations must be filed before filing LLP Form 24.
CERTIFICATION FROM CA
A statement of accounts disclosing NIL assets and NIL liabilities, certified by a practising Chartered Accountant up to a date not earlier than thirty days of the date of filing of Form 24 must be obtained.
FILLING OF STRIKING OFF (FORM 24)
LLP Form 24 along with above mentioned documents will be filed with the MCA to strike off name of LLP. On processing the application, if found acceptable, the concerned Registrar of Companies would cause a notice to be published on the MCA website announcing the striking off of the LLP.
BENEFITS OF VOLUNTARY CLOSURE OF LLP
1. FREE FROM COMPLIANCE BURDEN & PENALTY
Annual Compliances of LLP are not required to be done after closure.
2. NO PENALTY / DISQUALIFICATION
Penalties & disqualification of partners can be avoided after closure.
3. FAST TRACK EXIT
Fast track striking off of LLP can be done within 3 to 6 months.
4. SAVE MONEY
Closure is easy & cheap as compare to annual compliances.
DOCUMENTS REQUIRED FOR VOLUNTARY CLOSURE OF LLP
Required Documents List
PAN Card of Company.
PAN & Aadhar Card of Partner.
Digital Signature of Designated Partner.
ALL INCLUSIVE PACKAGE INCLUDES
Advise from Expert
CA Certificate on Statement of Accounts
Drafting of Resolution for Closure of LLP
Drafting of Affidavit from Designated Partner
Application Filing with ROC & Follow up