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Closure Of LLP

18450* Basic Package

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Overview

Closure of the Limited Liabilities Partnerships

The limited liabilities partnerships are a new form of entity introduced in India under the LLP Act 2008. The LLPs in India are exempted from the audit. If the annual turnover of an LLP in India is less than INR 40 lakhs and the capital contribution is less than INR 25 lakhs, then the LLPs enjoys the exemption from the audit. But an LLP can also wrap up for numerous reasons. 

Closure of a Limited liabilities partnership:

An LLP can initiate its Wrap up voluntarily or by the tribunal. Any Limited liabilities partnerships that want to wrap up must pass a resolution from the partners. At least three-fourths of the whole number of the companions should agree to the LLP's dismissal. If the LLP has creditors secured or unsecured, then the LLP must get the approval from the creditors for wrapping up the LLP.

Closure of the LLP by the tribunal:

The tribunal can wrap up an LLP only in the following cases:

1) If the LLP wants to wrap up

2) If there are less than two partners in the LLP for a period of six months 

3) When the LLP is not in its position to pay its debt

4) When an LLP acts against the sovereignty and integrity of India 

5) If the LLP fails to file a registrar statement of account or annual returns for five consecutive years

6) The tribunal finds out that it is equitable that the LLP should wrap up.

Wrapping up the LLP:

To wrap up an LLP, the entity should pass a resolution from the partners. After passing the resolution from partners, the LLP must apply with registrar within 30 days from the passing of the resolution. The LLP shall initiate the voluntary Wrap up of the entity on the date of giving the resolution. 

Once the resolution for the dissolution of the LLP is filed with the registrar, three-fourth of the partners shall ensure that the LLP has no debt. If it has any debt, then the LLP will pay it within a period mentioned in the declaration. But it should not surpass one year from the date of initiation of wrapping up the LLP. The partners need to verify the same with an affidavit signed by a majority of them. The following documents are also needed within 15 days of passing the resolution.

Statements of assets from the period of last account closure to the date of wrapping up. It should also be attested by two partners.

1) Statements of liabilities from the period of last account closure to the date of wrapping up.

2) Reports of the asset valuation made by the valuer. 

Wrapping up the Limited liability partnership with creditors:

If any LLP that wants to wrap up has any secured or unsecured creditors, then approval for winding up the LLP is required from the creditors. Before commencing the Wrap-up, the LLP must seek approval from the creditors. The Creditors must provide their view on the LLP's dismissal within 30 days of application received for settling the LLP. If all the creditors and the partners show agreement, the LLP can proceed with the dissolution voluntarily. 

Appointing LLP liquidator:

If any LLP wants to wrap up, it must appoint a liquidator. The Liquidator must be appointed within 30 days from passing the resolution. In case if any LLP has creditors, then the appointment of the Liquidator can only be made when two-third of the creditors approve it. 

Then the liquidators perform all the functions and duties to wrap up an LLP. The LLP liquidator will settle the creditor and adjusts the right of the partners. And while finishing his duty, the Liquidator also must ensure proper maintenance books and accounts relating to the Wrapping up of the LLP. 

Filing the wind-up report by the LLP liquidators

Once the Liquidator completely settles all the LLP affairs, then the LLP liquidator must prepare a report stating the manner of the dissolution of the LLP. The report should clearly state that all the property of the LLP has been disposed of. If two-thirds of the totals number of partners and creditors are satisfied with the LLP liquidator's report, then a resolution for wrapping up the account and the explanation must be passed by the partners of the LLP. 

Dissolution of the LLP

If the tribunal is pleased with all the procedures that have been followed to wrap up the LLP, the tribunal will pass an order. This order will clearly state that the LLP stand dissolved. The Liquidator then will submit a copy of the order from the tribunal with registrar to wrap up the LLP. The registrar after receiving the copy will publish it in the official gazette that LLP is closed

Acceptability criteria to wrap up an LLP

1) A report of the account that undertakes zero assets and liabilities made to date, not old than 30 days of the date filing approved by CA.

2) The LLP must not be running on business following the establishment for one year or longer. 

3) It has not restricted any bank account since the closing, along with a certificate.

4) LLP must not have any responsibility or amount due to the moneylenders.

5) The IT returns for the current year should be recorded. 

6) The LLP should not have any current bank account. If the bank account is cleared, the statement must be terminated, and it should obtain a certification from the bank that states the cessation of the account.

7) All the partners should agree on the implementation of the procedure.

Advantages

Compliance free

When an LLP wishes to wrap up, it would not have to stick to any compliances. That makes it free from all the compliances. 

No penalties

Once the LLP initiates its dissolution, it doesn't have to be worried about the penalties. They become free of penalties for the unaddressed causes. 

Appropriate business

If the entity is inactive and not having any source of transactions, it is better to dissolve the entity and use the resources in some other causes.    

Document Required

  • Final Books of Account
  • Final GST Return, if any
  • LLP Agreement

Time Lines

  • (10 to 15 Days)
  • Purchase the Service
  • Upload / send the Documents
  • Discussion with expert
  • Filing of application with registrar authorities
  • Receipt of Certificate
  • Confirmation to client

Service Covered

Pricing for what you want required service

Basic

18450*
  • Expert Consultation
  • LLP should be non-operative since incorporation
  • Filing of LLP Closer Application
  • DIN KYC for 2 Designated Partners

Business

22950*
  • Expert Consultation
  • Filing of LLP Closer Application
  • DIN KYC for 2 Designated Partners
  • One Year LLP MCA Annual Return Filing
  • One Year Income Tax Return filiong of LLP

Enterprise

28950*
  • Expert Consultation
  • Filing of LLP Closer Application
  • DIN KYC upto 4 Designated Partners
  • One Year LLP MCA Annual Return Filing
  • One Year Income Tax Return filiong of LLP
  • One Year Pending GST Return
  • Filing of GST Cancellation Application
  • Notes:
  • * This price is inclusive of all Govt filing fee and excluding GST amount.
  • 1. Stamp paper and notary charges to be paid as additional on actual basis.
  • 2. All tax liabilities and penalties, if any to be paid as additional on actual basis.
  • 3. Closer of LLP should be discontinue of business since last one year.

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