Procedure for Winding up of LLP
Winding up of LLP
- An LLP can be wound up in one of two ways: voluntarily by the members or compulsorily by a Tribunal. A Limited Liability Partnership must approve a resolution to close the LLP, which requires the consent of three-quarters of the total number of partners. If an LLP has lenders, the lenders’ permission is also necessary before the LLP can be closed.
- Prior to the introduction of the Limited Liability Partnership (Amendment) Rules in 2017, winding up an LLP was a lengthy and inconvenient process. The procedure has been made easier and simpler with the introduction of LLP Form 24.
- Owners with dormant or defaulting LLPs that are accumulating penalties should take advantage of this opportunity to close the LLP.
How to filling LLP Form 24 ?
- This is the first step, which involves filing a resolution with the registrar to wind up the LLP. This must be completed within 30 days of the resolution’s passage. The day on which the voluntary resolution is passed is considered the start date.
- The majority of the Partners (at least two) must sign a declaration stating there are no debts owed to the LLP, which must be backed up by an affidavit. If they have, they have sufficient provisions to pay within one year of the start of the winding up.
- Within 15 days of the passing of the resolution immediately before the date of passing of the resolution for winding up, a verification of the declaration and statement must be filed.
- Along with the resolution and affidavit, the majority partners must sign and submit the following documents: Statement of the obligations and assets for the time period from the final account closure to the date of the LLP’s winding up. The Partners must attest/sign this document.
- If the Limited Liability Partnership has creditors, you must get at least 2/3rds of the unpaid creditors’ approval.
- Provide an advertisement in a local newspaper within 14 days of receiving creditors’ consent. The appointment of a liquidator is essential if the LLP’s obligation and assets are expanding. Appointing an LLP liquidator to handle the LLP’s liabilities and Partner rights settlements and liquidation.
Filing Report: LLP closure report
- The liquidator is in charge of preparing the report that specifies how the LLP should be closed. The Limited Liability Partnership‘s property has also been sold, according to the document. The LLP Liquidator submitted the LLP closure report with the Registrar based on the agreement of two-thirds of the partners and creditors.
- Limited Liability Partnership is finally dissolved if the Tribunal/court is satisfied with the winding up reports, resolutions, and documents given by the LLP. When the Registrar receives the notification of dissolution, he or she issues a notice in the Official Gazette announcing the Limited Liability Partnership’s closure.
Procedure for Winding up of LLP
- STEP-1: COMMERCIAL ACTIVITY – CEASE
- STEP-2: CLOSE BANK ACCOUNT
- STEP-3: AFFIDAVITS & DECLARATION PREPARATION
- STEP-4: PREPARE DOCUMENTS
- STEP-5: FILE ALL PENDING DOCUMENTS
- STEP-6: OBTAIN A CHARTERED ACCOUNTANT CERTIFICATE
- STEP-7: FILE LLP FORM 24
Documents needed to be Attached with form 24:
- Statement of Accounts:
- Income Tax Return:
- Application for closure with the reason for closure.
- Affidavit: An affidavit signed by the designated partners
- Copy of Authority to Make the Application signed by all the Designated Partners.
- Application in the Form 24 must be accompanied with an Indemnity Bond
MCA : STK forms will be processed with C-PACE – Mansar Gururam
Can LLP be strike off without annual filing?
- No it is not possible for an LLP to be struck off without completing an annual report if it has no business? It is obligatory to file returns for the financial year in which the financial transactions were conducted, as stated in the most recent amendment. if the LLP has not carried out any business transactions, there is no need to file the returns.
- However, practically, we used to faced queries to file filling application of strike-off. then The partners have to face additional penalty at that time. Therefore, rather than facing additional penalties, it is beneficial to file returns on time before strike-off. LLP.
- The LLP Rules, 2008, Rule 37(1)(b), contains the statutory provisions for striking out an LLP. According to the guidelines, there is no exception for filing the e-form (LLP-8 and LLP-11) for LLP strike off.
- Before an LLP may be struck out, Every LLP must complete annual filing before strike off of LLP. the partners must face an extra penalty. As a result, filing taxes on time is preferable than suffering further penalties.
Relaxation in paying additional fees in LLPs Filling
- MCA provide the Relaxation in paying additional fees if LLPs are late in filling out all event-based e-forms due on or after February 25, 2022, and before May 31, 2022, but before June 30, 2022.
- Relaxation in paying additional fees in case of delay in filling e-forms by LLPs
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