Closing of LLP

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Procedure to Close a LLp

A) Declaring the LLP as Defunct

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.

eForm 24 is required to be filed for striking off the name of LLP under clause (b) of sub rule 1 of Rule 37 of LLP Rules 2008. Similarly, 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.

B) Winding up of LLP

Section 63, 64 and 65 of LLP Act 2008 governs the process for winding up of the 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,—

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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.

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