Structured Biiz

CLOSURE OF LLP

Through a Strike Off Process

Easy way to close a LLP is to follow the process of Strike Off as provided under Rule 37(1)(b) of the LLP Rules, 2009.

Any LLP can close down its business by following any of the following ways:

The LLP can be declared as defunct, in case the LLP is not carrying on any business operations for a period of 1 (One) year or more.

This means an inactive LLP (having no business operation from past one year or more) or a LLP which never started any business operations can take the benefit of strike off under Section 75 of the LLP Act, 2008 and Rule 37(1)(b) of the LLP Rules, 2009.

Such LLP can make an application to the Registrar of Companies for considering it as a Defunct LLP and removing its name from its Registrar of LLPs.

Similarly, Registrar of Companies have got the power to strike off any defunct LLP, if they have a reasonable cause to do so. In this case, the Registrar of Companies needs to send notice to the LLP of his intention to do so and they give 1 (One) month notice to the LLP to represent their case. The Registrar will also publish such notice of the application on its website for a period of 1 (One) month for the information of the general public. In case no revert is received within the mentioned period, the Registrar may strike off the name of the LLP.

Process Involved

Strike Off Application needs to be submitted to the Registrar of Companies along with a prescribed form giving details of the LLP and reasons of strike off

A resolution must be passed by all the Partners of the LLP in order to authorize one or more Designated Partner or Partner to prepare and submit an application to the Registrar of Companies

An affidavit and Consent Letter from all partners needs to be part of the application process

Indemnity Bond signed by all the Designated Partners giving undertaking of strike off name of the LLP from the ROC records

Copy of Statement of Assets and Liabilities not older than 1 (One) month, duly certified as true and correct by the Auditor or by a Chartered Accountant in Practice

Copy of acknowledgement of latest Income Tax Return needs to be filed along with Strike Off Application

In case the LLP is regulated by any other Regulatory body, then the application must be accompanied with an approval from the said regulatory body for removal of name of the LLP from the ROC record

The Registrar, upon being satisfied that the LLP is defunct, will strike off the LLP and dissolve the same.

Winding up & Dissolution of LLP

Section 63 to 65 of the LLP Act, 2008 prescribed the process for winding up of the LLP. The modes of winding up and dissolution of LLP under the said provisions of the LLP Act, 2008 are as follows:

  • Voluntary Winding Up
  • Compulsory Winding Up

The appointment of a Liquidator is compulsory in case of Winding Up and Dissolution of the LLP through Voluntary or Compulsory Winding Up.

Under Voluntary Winding Up, winding up proceedings are filed by the LLP voluntarily. Under this, the partners may by themselves decide to wind up the operations of the LLP.

Under Compulsory Winding Up, the Tribunal may compulsorily wound up the LLP,

  1. If the LLP decides that the LLP be wound up by the Tribunal;
  2. If, for a period of more than 6 (Six) months, the number of partners of the LLP is reduced below 2 (Two);
  3. If the LLP is unable to pay its debts;
  4. If the LLP has acted against the interest of the sovereignty and integrity of India, the security of the State or Public Order;
  5. If the LLP has made a default in filing with the Registrar the Statement of Accounts and Solvency or annual return for any consecutive 5 (Five) Financial Years;
  6. If the Tribunal is of the view that it is just and equitable that the LLP be wound up.

Closure of LLP

All inclusive

  • Closure of LLP – 10,999/-
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(*Stamp Paper, Notary Charges and Govt. Fees of Rs. 500/- shall be charged separately. All tax payments and penalties for the dues of the earlier year's filings shall be borne by the Client.