How to close LLP in India – Documents & Procedure in India
The Limited Liability Partnership (LLP) is a common partnership structure in which each member is only liable for a certain amount of money. In fact, an LLP is a company that operates under specified legal conditions and paperwork. There is a pre-determined procedure for registering or closing an LLP. Being a member of an LLP has some advantages, but it also has some disadvantages.
Main Reason to Close the Limited Liability Partnership in India –
- If the Limited Liability Partnership is Registered for any specified project and its has been completed.
- Limited Liability Partnership has become bankrupt.
- Few Startups just started with the idea however after testing their ideas there is no profitability so they want to close the Limited Liability Partnership.
- When there is no business activity from the long time.
- By order of Court due to any situations.
- Partners are not willing to continue the business or partnership.
- Only 1 partner are remain after the death of the other partner & he is willing to close the Limited Liability Partnership & business.
The entire process could take 3 to 6 months, depending on the Registrar’s office. Following clearance of the application, the facts will be posted on the Ministry of Corporate Affairs’ website for one month for the general public’s awareness.
Normally People are discussion about how to establish an LLP company & most of them are unaware that there is a strict procedure for closing an LLP in India. In this article, we will discuss few myths and explain the required steps to close an LLP registered firm in India in details.
How can you struck off an LLP?
To voluntarily struck off LLP, a majority of the partners must sign a petition, or both partners if there are only two. Before you file for a strike off, you must notify creditors, members, and anybody else who has an interest in the LLP’s business so that they can protest if they desire.
FOR LLP STRIKE (CLOSER OF LLP) PROCESS:
According to Section 75 of the Limited Liability Partnership Act, 2008, read with Rule 37, an LLP that has not carried on any business or operation for a period of one year can file an application to the Registrar for suo-moto striking off of the LLP’s name.
Voluntarily closure of an LLP : The method described here is for voluntary LLP winding up. Please make sure that your firm satisfies the minimum criteria before we begin the process of closing it:
- ROC & Income tax Returns for the FY in which the LLP business should be closing.
- Bank account must be closed down.
- LLP deed has to be present.
- Form-3 should be used to register the LLP deed with the ROC. (This registration is not required, according to the MCA’s recent statement, but as we have not handled any such case, the risk remains with you.)
- LLP PAN card.
PROCESS FOR LLP CLOSING BY FILLING AN APPLICATION WITH ROC:
Main Steps to closing an LLP In India.
Step-1 – Pass a Resolution with regards to closer of an Limited Liability Partnership in India.
Step-2 – Form 1 Filings process
Step-3 – Declaration of the Debt related to Limited Liability Partnership
Step-4 – Form 4 & Value of the Assets
Step-5 – Obtain consent from the all the Creditors of Limited Liability Partnership
Step-6 – Filings & Appointment of Liquidator of Limited Liability Partnership
Step-7 – Finalization of the Books of Accounts of LLP
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