Closure of LLP

A LLP incorporated under LLP Act and registered by the Registrar need to adhere the compliance as per the provisions contained in LLP Act 2008 and relevant rules made there-under.

There are many circumstances which lead to the decision of Closure of LLP, these circumstances depend upon the facts and situation of the LLP, however some most common circumstances which leads to closure of LLP are:

• The LLP unable to commence business after incorporation, there might be situation that the LLP is incorporated for a business but after incorporation the business might not got started, then eventually it leads to closure of LLP after some significant time period say one year.
• The objective for which the LLP is incorporated is fulfilled and there is nothing left to operate the LLP. There are certain LLP which got incorporated for the purpose of specific task or objective, after fulfilment of such task or objective the LLP need to be closed.
• The business of the LLP no longer exist and it incur losses, there might be circumstances wherein the LLP was successfully operating but after some years its business doesn’t exist and the LLP incur losses, thus such LLPs may got closed.
• The partners / management of the LLP dies and remaining partner doesn’t want to continue the LLP.
• The LLP become insolvent and unable to pay to its debt, in such cases there are circumstances for compulsory winding up of LLPs by the tribunal.
• Non compliance lead to monetary penalty in terms of late filing fees and also leads to certain severe consequences such as Inactive status of LLP, strike off of defunct LLPs by the registrar etc. Such situation may leads to closure of LLP
• The LLP has operated in the manner which is against the interest of sovereignty and integrity of India, security of state, friendly relation with foreign state etc.
• The LLP activity was conducted in fraudulent manner and the statement of affairs has been guilty of fraud, misfeasance or any misconduct then such circumstances leads to closure of LLP.

Procedure of Closure of LLP can be in the form of:

1. Voluntary closure of LLP: In this case the LLP passes a resolution for winding up of LLP in a properly convened meeting of members / partners.
2. Winding up of LLP by order of Court: In this case any competent court or tribunal has ordered for winding up of LLP due to reasons recorded in writing and mentioned in the order of winding up of LLP.

In the case of voluntary winding up of LLP the partner / management of the LLP can proceed for filing of e-form 24 which declare the LLP as defunct and strike off of the name of LLP under rule 37 of LLP Rules 2008. All forms required for Closure of LLP need to be filed on MCA Portal.

In case of compulsory winding of LLP, it is closed in the manner as directed by competent court  /tribunal.

With the ever changing Law and regulatory requirements, we keep on track and advise the same on timely manner in order to ensure proper compliance. We at ReturnFilings.Com will understand the purpose of your closure of LLP and thereafter will provide you detailed analysis mentioning the law requirement and compliance need to fulfill in order to provide LLP closure related services economically and efficiently. We at ReturnFilings.Com will provide you details of regulatory filings in order to ensure proper smooth and timely compliance. We at ReturnFilings.Com are determinate to provide end to end solution; our motto is you concentrate on your business while we at ReturnFilings.Com will take care of all your compliance need.