Winding up or Close an LLP
Close Your LLP Seamlessly with Expert Mantra
An LLP can be closed if it has not started its business or has been inactive for the past year. Expert Mantra helps you file the closure application with the mutual consent of all partners.
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Winding Up an LLP – A Complete Overview by Expert Mantra
Closing a Limited Liability Partnership (LLP) requires following specific legal procedures as per the LLP Act. A resolution for closure must be filed with the Registrar of Companies within 30 days of its approval. Additionally, within 15 days of passing the resolution, a statement of assets and liabilities—attested by at least two partners—must be submitted, along with a report on the valuation of the LLP’s assets.
Once these steps are completed, the majority of partners must declare that the LLP has no debts or that it can repay its debts within a specified period (not exceeding one year from the date of winding up).
Key Compliance Requirements
If you have registered your business as an LLP, it is mandatory to file annual returns whether or not the business is operational. Non-compliance may result in penalties under the LLP Act, for both the LLP and its partners.
If you do not plan to continue your LLP and wish to wind it up, you must follow the prescribed legal procedures. Expert Mantra offers seamless assistance in both the registration and closure of LLPs.
Conditions for Winding Up an LLP
The LLP must be inactive for at least one year or have been inoperative since its establishment.
It should not possess any assets at the time of applying for closure.
Required Documentation
To close an LLP, you need to:
Submit the application along with the prescribed fees and affidavit.
Obtain consent from all partners.
File the final Income Tax return and provide a Statement of Accounts (for the last 30 days from the date of application).
Timeline for Closure
The closure process usually takes up to two months, provided all partners promptly complete the necessary formalities.
How to Close Your LLP Online with Expert Mantra?
To close your Limited Liability Partnership (LLP), you need to file Form 24 with the Registrar of Companies (ROC), along with the required documents such as declarations, indemnity bonds, and affidavits from all partners– all in just 3 simple steps:
Schedule a call with our compliance experts
Share the required details and documents
Sit back while we handle the registration process for you
Documents Required from Partners & Designated Partners for Closing an LLP
To successfully close your Limited Liability Partnership (LLP), the following documents must be submitted by all partners and designated partners:
PAN Card of Partners
– Each partner and designated partner must provide their PAN card along with the application form and indemnity bond submitted to the Registrar.Aadhaar Card of Partners
– Aadhaar cards of all partners and designated partners are required for identity verification during the closure process.Latest Address Proof of Partners
– A valid and recent address proof (such as utility bill, bank statement, or driving license) for each partner must be submitted.Consent Letter
– A signed consent letter from all partners is mandatory to proceed with the closure application, which is filed along with the prescribed form and fees.
Expert Mantra ensures all these documents are accurately prepared and filed to make the LLP closure process smooth and compliant.
How to Wind Up an LLP in India – Step-by-Step Guide by Expert Mantra
Winding up a Limited Liability Partnership (LLP) in India involves several legal steps to ensure compliance with the LLP Act. Here’s a detailed process:
Step 1: Pass a Resolution for Winding Up
A special resolution must be passed by all or at least 75% of the partners agreeing to dissolve the LLP.
Step 2: File Form No. 1
Within 30 days of passing the resolution, Form No. 1 is filed with the Ministry of Corporate Affairs (MCA), along with a copy of the resolution.
Step 3: Submit No-Debt Declaration
At least two partners must declare that the LLP has no debts or liabilities, or that any existing debts will be settled within one year of starting the winding-up process.
Step 4: File Form No. 4 & Asset Valuation Report
Submit Form No. 4 to the registrar within 15 days, along with a statement of asset valuation and a declaration confirming that the closure is not intended to defraud anyone.
Step 5: Obtain Creditor Consent
At least two-thirds of the LLP’s creditors must provide their consent to proceed with winding up.
Step 6: File Form No. 6
Within 14 days of receiving creditor consent, an advertisement regarding the closure must be published in a local newspaper. If the LLP has assets or liabilities, a liquidator will be appointed, and their statement must be filed using Form No. 6.
Step 7: File Form No. 9 & Final Accounts
Prepare the final account statement of the LLP and submit it along with Form No. 9 to complete all formalities and conclude the closure process.
Expert Mantra helps you navigate each of these steps smoothly, ensuring a hassle-free and compliant winding-up process.
Expert Mantra Procedure for Winding Up an LLP
Step 1: Filing Form 24
To initiate the closure, Form 24 is filed with the Registrar of Companies (ROC) along with:
A declaration from all partners
Indemnity bonds
An affidavit confirming that all provided information is true and accurate
Step 2: Public Notice
Once the application is submitted, the ROC will publish a public notice on its website for a period of one month, stating the details of the winding-up application.
Step 3: Removal of LLP Name
After the one-month notice period, the ROC will officially remove the LLP’s name from the register and publish the closure notice in the Official Gazette, marking the legal dissolution of the LLP.
Expert Mantra ensures all documents are correctly prepared and submitted, making the winding-up process smooth and compliant.
Recent Updates on Winding Up Rules
3 June 2020 – The Ministry of Corporate Affairs (MCA) has introduced The Companies (Winding Up) Rules, 2020, effective from 1st April 2020.
These new rules aim to simplify the closure process for smaller companies, eliminating the need for tribunal intervention. However, they apply only to specific classes of companies as defined under Section 361 of the Companies Act, 2013.
Expert Mantra stays updated with these regulations to ensure a seamless and compliant winding-up process for your company.
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Frequently Asked Questions…
Which form is required to appoint a statutory auditor?
A company must file Form ADT-1 with the Registrar of Companies (ROC) to appoint a statutory auditor.
Which form must accompany the Director’s Report?
The Director’s Report should be submitted along with Form AOC-4, which includes the company’s financial statements and relevant documents.
Are audited financial statements mandatory for private limited companies’ annual filings?
Yes, audited financial statements are mandatory for all private limited companies, regardless of their revenue or operational status.
What regulations must a private limited company follow?
A private limited company must comply with the Companies Act, 2013, along with ROC filing requirements, Income Tax regulations, and other applicable laws based on its operations.
How should a company file its annual returns?
Annual returns must be filed using Form MGT-7 with the ROC, along with Form AOC-4 for financial statements.
What is annual compliance?
Annual compliance refers to the mandatory filing of returns, financial statements, and documents required by law to ensure that a company remains legally active and in good standing.
Why is business compliance important?
Compliance ensures that the company operates legally, avoids penalties, maintains transparency, and builds trust with stakeholders and regulatory authorities.
