LLP CLOSURE
Declaring a LLP Defunct- This can be done by 2 ways:
1. Suo Moto by LLP- In case the LLP wants to close down its business or where it is not carrying on any business operations for the period of one year or more, it can make an application to the Registrar for declaring the LLP as defunct and removing the name of the LLP from its register of LLP’s. E-Form 24 is required to be filed for striking off the name of LLP.
2. By Registrar- Registrar also has the power to strike off any defunct LLP after satisfying himself of the need to strike off and has reasonable cause. However, in this case, registrar has to send a notice to the LLP of his intention and request to send their representation within one month from the date of the notice. The Registrar shall publish such notice or content of the application made by the LLP on its website for a period of one month for the information of the general public. In case no reply is received within the mentioned period, registrar may strike off the name of LLP.
Conditions for Winding Up a LLP:
1. The LLP should be inactive for a period of at least 1 year, or it should be inoperative from the date of establishment.2. LLP should not have any assets or liabilities as on the date of application.
3. The LLP should have the consent of all its partners, for closure.
4. Form 24 LLP is filed with ROC, to indicate that the LLP has no debts or it is in a position to pay all debts within a specified period.
Winding Up of a LLP- It is the process where all the assets of the business are disposed off to meet the liabilities of the same and surplus any, is distributed among the owners. The LLP Act 2008 provides for following two modes for winding up the LLP i.e.:
◦ Voluntary winding up
◦ Compulsory winding up:
Voluntary Winding up - Under this, the partners may between themselves decide to stop and wound up the operations of the LLP.
Compulsory winding up - A limited liability partnership may be compulsorily wound up by the Tribunal,—
◦ if the limited liability partnership decides that limited liability partnership be wound up by the Tribunal;
◦ if, for a period of more than six months, the number of partners of the limited liability partnership is reduced below two;
◦ if the limited liability partnership is unable to pay its debts;
◦ if the limited liability partnership has acted against the interests of the sovereignty and integrity of India, the security of the State or public order;
◦ if the limited liability partnership has made a default in filing with the Registrar the Statement of Account and Solvency or annual return for any five consecutive financial years; or
◦ if the Tribunal is of the opinion that it is just and equitable that the limited liability partnership be wound up.
Procedure for Winding Up of LLP:
1. An application is required to be made in e-Form 24 to the Registrar of Companies for Striking off the name of the LLP with the consent of all partners.
2. he Registrar shall publish a notice on its website as to the content of the application for a period of one month for the notice of the general public.
3. Application submitted to be supported by Indemnity Bonds to indemnify any person legally claiming after the LLP to be strike off and duly sworn Affidavits declaring all the information provided and statements given to be true, from all partners.
4. Application filed also to be supported by approvals or No Objection Certificates from concerned Regulatory Authorities with which the LLP is registered. For e.g. LLP engaged in or registered with RBI for Banking Business has to obtain NOC from RBI before winding up of its affairs.
5. The Registrar, where he has sufficient cause to believe that the limited liability partnership has any asset or liability, satisfy himself that sufficient provision has been made for the realization of all amount due to the limited liability partnership and for the payment or discharge of its liabilities and obligations by the limited liability partnership within a reasonable time and, if necessary, obtain necessary undertakings from the designated partner or partner or other persons in charge of the management of the limited liability partnership
6. On the expiry of period of one month, the Registrar may, by an order, unless cause to the contrary is shown by the limited liability partnership, strike its name off the register, and shall publish notice thereof in the Official Gazette, and on the publication in the Official Gazette of this notice, the limited liability partnership shall stand dissolved.
Documents required for Winding Up of LLP:
1. Self- Attested PAN cards of all the partners and designated partners of LLP.
2. Aadhaar card of all the partners and designated partners of LLP.
3. Address Proof of Partners
4. Copy of Detailed Application – Mention full details of LLP plus reasons for closure
5. Copy of Authority to Make the Application – The person who is making application must be authorized by all the partners to make such application.
6. Copy of Consent of all Partners.
7. Copy of Consent of all Creditors– if no creditor than Certify that that LLP have NIL Creditor.
8. Copy of the undertaking/ indemnity bond for striking off name Indemnity bond
9. Copy of statement of assets and liabilities made to till date not earlier than thirty days of the date of filing duly certified as true and correct by auditor/chartered accountant in practice
10. Copy of acknowledgement of latest Income tax return.
11. The copy of LLP agreement; if available or the date of becoming Partner
12. Indemnity Bond agreeing to indemnify any liability that may arise after the name has been stroked out from the Registrar.
13. The confirmation letter that the LLP has no liability or payment due to all the creditors.
14. statement or certificate from the bank saying the closure of Bank Account to be provided.
15. Affidavit/ Declaration, either jointly or separately, so that the Limited Liability Partnership ceased to carry forward commercial activity from the Date or has not begun business.