Get to know how to close an LLP in India, required LLP closure documents, and LLP closure fees from the experts. The complicated steps to close LLP in India is now simplified.
Limited Liability Partnership (LLP) is a deal where all the partners have limited liabilities. Essentially, Close an LLP Company is set up under formal rules and restrictions. These rules and regulations are much more complex when compared to traditional partnership documents. Closing LLP in India is a complex process. The LLP Act, 2008 lays down the basics on how to close an LLP in India, the required LLP closure documents, and LLP closure fees.
The process to Close an LLP Company in India Online: How to Close an LLP in India
An LLP is a corporation that regulates all the set out legalities and paperwork. There is a specified protocol for registering or close a Limited Liability Partnership in India. Two major scenarios result in closing an LLP in India and they are discussed below.
1. Declaring the LLP Defunct
In this case, a petition should be filed to the registrar.
- The petition encompasses all the LLP details, and should declare that the LLP is not in a practical use or is extinct
- E-Form 24 is expected for documenting within Section 37(1)(b)
- All of the mandatory documents regarding the LLP have to be provided
- After the compliance, the LLP name will be removed from the official register of LLP
2. Voluntary Close an LLP
Voluntarily closing an LLP is a long and complicated process. Vakilsearch can provide expert advice and complete backup throughout this process. The first step involves deciding to close the LLP
- LLPs can be terminated willingly with the support of at least 3/4th of the total number of partners
- A replica of the file should be documented with the registrar on Form 1 within 30 days of enacting the decision.
Winding Up With Creditors
It is the next step in the voluntary winding up of an LLP process
- Here an acceptance statement is procured from the partners in Form 2
- It should provide evidence stating that they have no outstanding amount or they will be compensated the outstanding due within a certain time period
- The period should not be more than a year from the date of enacting the decision to close the LLP.
Public Notice for Winding up the LLP
- After passing the decision, within 14 days, the company should inform the public regarding the LLP closure by advertising in a public newspaper
- It can be either the one circulating in the province where the company is registered or the main department where the LLP is present
- This publication acts as a proof for closing the LLP and also informs the public regarding the same.
Appointment of LLP Liquidator
- An LLP liquidator is appointed with the approval of a majority of the partners
- The remuneration for the LLP liquidator is fixed
- The liquidator will be chosen only after the permission of 2/3rds of the creditors
- Both the creditor and the partner have the right to assign an LLP liquidator. However, the LLP liquidator appointed by the creditor will be eligible.
Dissolution
- As soon as the LLP is wound-up, all the liabilities are discharged, and assets are liquidated
- After completing this process, a summary will be provided by the LLP liquidator in Form 9
- It will provide all the information on the winding-up and how it has been conducted
- In the end, the LLP is successfully dissolved.
The total LLP closure fee is around ₹1000 for the FTE form. After completing the process, all the evidence will be published on the Ministry of Corporate Affairs website for one month for the awareness of the public.
Main Reason to Close an LLP Company in India
- If the LLP is registered for any specified program and it has been completed
- The LLP has become bankrupt
- Startups just started with the intention, however after seeing that there is no profitability they decide to close the Limited Liability Partnership
- When there is no employment action for a long time by rule of the Court due to crisis, one can close the LLP
- Members are not ready to proceed with the employment or partnership
- Only one partner continues after the death of the other partner and is ready to close the LLP.
How Vakilsearch Can Help in Closing an LLP
The whole procedure to close an LLP in India could range up to 3 to 6 months, based on the registrar’s department of the following authorisation petition. Vakilsearch can provide a holistic approach in just three steps to close your LLP in India. Reach out to the experts at Vakilsearch and we will help to close your LLP.
Also, read:
