Closure Of LLP

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Closure Of LLP

The Limited Liability Partnership (LLP), which is not carrying on its business since its incorporation or which has terminated/stopped carrying on its business for a period of one year or more, can apply to the Registrar for its closure and also for removal of its name from the Register of the LLPs. If the LLP has turned dormant, then it is better to close it than fulfilling all the compliances, and it is also better to close than pay a fine or penalty in case the LLP is inactive.

Process to Close LLP in India

  • Step 1: Resolution - A special resolution has to be passed by all or ¾’thof the partners of the company, agreeing to dissolve the partnership.
  • Step 2: Form No. 1 - Within 30 days of passing the resolution, form no.1 is filed with the Ministry of Corporate Affairs (MCA) with a copy of the resolution,
  • Step 3: No Debt Declaration -At least two members of the LLP have to declare that it has no debts or liabilities. Or if it does, it will be settled within one year from the commencement of winding up.
  • Step 4: Form 4 & Value of Assets - Form No. 4 along with a report of the value of LLP’s assets has to be submitted to the registrar within 15 days of filing the forms and a statement declaring that the LLP is not being closed to cheat anyone.
  • Step 5: Creditor Consent - The next step is to acquire consent from the creditors of the LLP, to wind up the business. For this purpose, at least ⅔ rd of company creditors have to provide consent.
  • Step 6 – Filing Form 6 - Within 14 days of receiving consent from creditors, an advertisement has to be filed in the local newspaper. In case if the LLP has assets or liabilities, a liquidator is appointed and his/her statement needs to be filed using form 6.
  • Step 7: Filing Form 9 - Prepare the LLP’s final account statement, and submit them along with form 9 to conclude all formalities.

Documents required for Closing a LLP

Partners need to submit the following documents in order to close the LLP:

  • PAN Card of Partners- Apart from the application form and indemnity which needs to be submitted to the registrar, for the closure of LLP, you are also required to submit PAN cards of all the partners and designated partners of LLP.
  • Aadhaar Card of Partners- Similar to PAN card, another document that needs to be submitted for closure of LLP is the Aadhaar card of all the partners and designated partners of LLP
  • Latest Address Proof of Partners- In addition to the above mentioned two documents, the latest address proof of all the partners of LLP is also needed to be submitted.
  • Consent letter- For the closure of LLP, you would also be required to get the consent letter signed by all the partners and submit it along with form and fees.