How to Close LLP in India - Provision, Process and FAQ | Jordensky

How to Close LLP in India - Provision, Process and List of Documents required for Closure of LLP in India

How to Close LLP in India - Provision, Process and FAQ | Jordensky

Even if the Limited Liability Partnership (LLP) is inactive, an LLP must adhere to certain regulations. It is preferable to close the inactive LLP in order to be free of such obligations. In India, an LLP is closed when it has not carried out operations for more than a year or when it ceases to carry on business for more than a year. You can apply to the Registrar of Companies to have the LLP's name removed (RoC).

The striking-off of an LLP is done using the LLP Form 24, which was issued by the Ministry of Corporate Affairs (MCA) as an amendment to the Limited Liability Partnership Rules, 2009.

Requirements for the Closure of LLP

The application for LLP closure must meet certain criteria, according to the MCA Guidelines. These are some of the prerequisites that must be met:

  • Settling the LLP's overdue liabilities
  • Closing all of the LLP's bank accounts and receiving a certificate for the same
  • Filing of Forms 8 and 11 until the end of the fiscal year in which the LLP ceased to carry on business

Documents Required for LLP Closure

Aside from the details and actions described above, the following documents will be required to file for the closure of LLP:

  • All designated partners' Aadhar card copies
  • If available, a copy of the LLP agreement or the date you became a partner in the LLP.
  • All of the recognized partners' complete addresses
  • A statement certified by a chartered accountant demonstrating that the LLP has no assets or liabilities.

What Is the Purpose of Form 11 and Form 8?

Form 11 is an annual return statement. Every LLP is required to submit Form 11 to the RoC within 60 days of the fiscal year's end. In other words, Annual Returns must be filed annually on or before May 30.

Every LLP is required to compile and complete its accounts for the financial year. Form 8 must be filed with the RoC within 30 days after the end of the financial year by any two designated partners. In other words, it must be filed by October 30th of each year.

These forms must be submitted by the due dates. Filing these documents after the due date may result in a Rs.100 penalty per day.

Is an Updated Annual Filing Necessary for the Closure of an LLP?

Limited Liability Partnerships are legal entities in their own right. As a result, all designated partners are responsible for keeping accurate books of accounts and completing the annual return with the MCA for each fiscal year. The LLP's most critical annual compliances are Form 8, Form 11, and Income Tax Returns.

The LLP Amendment Rules, 2017 require the timely submission of annual forms Form 8 and Form 11. This means that you must file these annual documents even if you are inactive.

The Forms must be filed up to the end of the fiscal year when the LLP discontinued operations or business. For example, if the LLP ceases operations on July 31, 2021, Forms 8 and 11 are required.

What Is the Procedure to Strike off an LLP?

The following measures must be taken to bring your LLP to a close:

  • Close any bank accounts linked to the LLP.
  • Sell all assets and pay off all LLP liabilities, assuming any exist.
  • Obtain the written approval of all partners to proceed with the strike-off.
  • Form 24 must be completed and filed with the appropriate judicial registrar.

The Registrar then reviews the documents and paperwork. The LLP may be required to submit further documentation if the Registrar sore quests. Once the registrar is satisfied with the form and documentation, the LLP's name will be published in the Official Gazette to see whether there are any complaints from the general public. If no objections are raised, the registrar will strike the LLP's name from the register.

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