Introduction
Closing a Limited Liability Partnership (LLP) in India involves a structured legal process to ensure compliance with the Limited Liability Partnership Act, 2008. The most efficient method for dissolving an inactive or defunct LLP is through the ‘striking off’ procedure by filing Form 24 with the Registrar of Companies (ROC).
Benefits of Striking Off an LLP
Cost-Effective
It is a simpler and more economical method compared to winding up.
Time-Efficient
The process is relatively quicker, typically taking between 3 to 6 months.
Compliance Relief
Eliminates the need for ongoing compliance filings for inactive LLPs.
Eligibility Criteria for Striking Off an LLP
- Inactivity: The LLP must have been inactive for at least one year.
- No Assets or Liabilities: The LLP should not possess any assets or liabilities at the time of application.
- Compliance: All pending compliances, including the filing of annual returns (Form 11) and statements of accounts (Form 8), must be completed up to the end of the financial year in which the LLP ceased operations.
- No Pending Litigation: There should be no ongoing legal proceedings involving the LLP.
- Bank Account Closure: The LLP’s bank account must be closed, and a closure certificate obtained.
Documents Required for Filing Form 24
- Application for Closure: Duly filled Form 24.
- Consent of Partners: Written consent from all partners agreeing to the closure.
- Affidavits: Affidavits from all partners declaring that the LLP has no liabilities and has not commenced business or ceased operations for at least one year.
- Indemnity Bonds: Indemnity bonds from all partners ensuring to indemnify any liability that may arise after striking off.
- Statement of Accounts: A statement of accounts certified by a Chartered Accountant, reflecting nil assets and liabilities, not older than 30 days from the date of application.
- Income Tax Return Acknowledgment: Copy of the latest Income Tax Return acknowledgment.
- Bank Closure Certificate: Proof of closure of the LLP’s bank account.
Step-by-Step Process for Striking Off an LLP
1. Convene a Meeting
All partners should convene a meeting to pass a resolution for the closure of the LLP.
2. Settle Outstanding Liabilities
Ensure all liabilities are settled, and necessary compliances are up to date.
3. Close Bank Account
Close the LLP’s bank account and obtain a closure certificate.
4. Prepare Documents
Draft and execute the required affidavits, indemnity bonds, and obtain a certified statement of accounts.
5. File Form 24
Submit Form 24 along with the necessary documents to the Registrar of Companies (ROC).
6. ROC Verification
The ROC reviews the application and, if satisfied, issues a notice of striking off.
7. Publication
The notice is published in the Official Gazette, and if no objections are received within the specified period, the LLP is struck off.
Important Considerations
Ensure all statutory compliances are met before initiating the closure process to avoid legal complications. Engaging professional services can facilitate a smooth and compliant closure process.