Winding Up of Limited Liability Partnership (LLP)

A dormant LLP is suggested to be closed down in order to save the compliance cost and avoid penalties.

Digital Filings can help you in…:

 Ascertaining the appropriate process to wind up an LLP

 Accumulating required documents

 Drafting affidavit and Indemnity bond

 Filing closure application for approval

From INR 15,899/- all inclusive fees; 12 Months* EMI@INR 1,420/-

Understanding Winding Up of LLP

LLP mode of business was originally introduced in Indian the year 2009 and later was amended in 2017. LLP is considered to be the most easy to manage business-model as it provide benefits of limited liability framework to its partners. If an entity is not engaged in any business activities or is inactive for a long time, then it is preferred to close down the business to save on the compliance costs and also to avoid any possible legalities or fines.

The procedure to be followed for winding up an LLP depends on specific reasons for the closure and current financial position of the business. It can be done in three ways as follows:

  • Voluntary Winding Up – On receiving approval from at least 75% of partners along with a declaration for LLP’s inability to pay off all the debts in one year, the LLP can initiate winding up process.
  • Striking Off –As per the amended law, Form 24 allows an LLP to get its name easily strike off from the register of authority by following up a simple procedure and submitting the Form to Ministry of Corporate Affairs (MCA).
  • National Company Law Tribunal (NCLT) – Under the following circumstances, the authority can initiate the winding up process for an LLP:
    • Less than two partners in a company for more than 6 months.
    • LLP becomes incompetent to pay its debts
    • LLP stops filing annual returns for five consecutive years
    • LLP stops acting in sovereignty and integrity of the Constitution of India.
    • NCLT justifies its discretion that it is fair to completely wind up the active company.

An LLP is an artificial person and is created by law. It is suggested to have thorough knowledge of the matter and follow the procedure as instructed by the judiciary for its closure.

Key Reasons  for Winding Up an LLP

Compliance Burden

Compliance Costs

Instant and Hassle-Free

Not as Planned

Compliance Relief

Irrespective of its no commercial engagements, an LLP is bound to pay annual compliance and regularly maintain its books to avoid penalties or legalities. All these statutory procedures consume a good amount of time and efforts which can be saved by closing down an inactive LLP.

Not as Planned

Business is full of uncertainties and things do not always turn out the way we plan. Therefore Expert Advisers @ Digital Filings suggest letting go any un-profitable venture and recommend business owners to put their efforts and money on some fruitful plans.

Instant and Hassle-Free

An LLP can be wound up easily with minimal procedural requirement and does not require a huge or complicated documentation. Overall, the LLP winding up process is not complicated task, thus it is always preferable to shut down a problematical or an inactive LLP before incurring heavy losses.

Compliance Cost

A business is obliged to file Income Tax Returns (ITR), Form 11, and Form 8 with the Registrar of Company (ROC) even in an inactive mode. Such legal formalities include compliance costs. Skipping these mandates will result in heavy penalties (as much as INR 100 for each day) or even certain legalities. Thus, to save this financial wastage, it is advisable to close down an inactive LLP.

Required Documentation Chart

Required Documents for Winding Up an LLP

Company Documents

  • Scanned copies of all filed Income Tax Returns (ITR).
  • Scanned copies of all filed returns with MCA
  • Indemnity bond from all Partners
  • An affidavit from all Partners

Financial Documents

  • Scanned copy of the financial statement (NIL Liabilities and Assets)
  • Scanned copy of Bank account closure approval

We are Glad to Help!

LLP is a creation of law and can be closed by established legal procedures. The reasons for shutting down an LLP could be various, however, the circumstances in which an LLP is being closed is what matters for deciding the process that needs to be adopted.

Do Not Worry!

Experts @ Digital Filings can proficiently assist an LLP to wind up its operations in an easy and economical way.

Pocket-Friendly Options

How we Do It…

With complete support of existing members, an LLP can be wound up with ease in a maximum time frame of just two months. Partners @ Digital Filings can assist LLPs in cutting down troubles and smoothly managing the entire process.

g

Review, Compile, and Initiate

Before initiating the LLP winding up process team @ Digital Filings will first review the business activities to ascertain the appropriate procedure along with the compiling the supporting documents.

g

This Certificate is Critical

The bank account opened in name of the LLP at time of incorporation needs to be closed and a closure certificate is to be collected from the banker to initiate the wound up process.

g

Certifying Financial Statements

To wind up, the LLP also needs to acquire certified financial statements from a practicing auditor or a Chartered Accountant (CA). The financial statement must state the NIL assets and Liabilities of the firm.

g

Partners Consent

A partner’s meeting needs to be conducted to intimate and get approval for winding up the LLP. At least 75% of partners must give their consent in a prescribed LLP agreement format to start with the LLP winding up process.

g

These Legal Papers are Important

Post receiving the approval to wind up LLP, an affidavit is submitted by partners stating the reliability of disclosed information and documents. Along with the affidavit, an Indemnity Bond is also signed by the partners making them liable for any possible future debts.

g

Filing Closure Application for Attaining Approval

The closure application is submitted to the registrar along with required documents which are examined by the concerned authority. On satisfactory inspection, the authority will approve the application for winding up and the LLP will be closed within 3 to 4 months.

Our Patrons’ Speak

team-3“Heartfelt thank you for proficiently taking care of all the registration related tasks and letting me focus on my business operation without any stress.”

Srinivasan

team-3“Highly impressed by the personal attention of the professional staff in getting the GST registration done and arranging the MSME certification for my business.”

Hari

team-3“Thank you Digital Filings for all your professional and timely support in getting my company registered.”

Sachin Gupta

team-3“I never thought it would be so easy to get my proprietorship firm registered. Thank you team Digital Filings. I will refer your proficient services to my friends too.”

Pawan

team-3“Thank you for simplifying the so complicated filing and documentation and getting my business smoothly registered.”

Amit

Mission Statement

Every Partner at Digital Filings is Focused...
...to Provide a Comprehensive Legal Assistance Mechanism...
...Diligently Customized for Emerging Entrepreneurs!

We at a Glance...

Digital Filings is a leading business and legal services provider in India, assisting entrepreneurs in effectively and economically setting-up and managing their venture. Digital Filings consistently ensures that your venture is always compliant, so you can efficiently focus on making your business ascend.

Our strong network of proficient partners thoroughly understands the business specific regulatory/legal requirements and is focused to assist business owners at every stage of their venture.

Our panel of competent professionals, including Chartered Accountants, Company Secretaries, Lawyers, Cost Accountants, Chartered Engineers, Financial Gurus, and Business Experts are just a call away to gladly serve you.

 

Book your appointment Today!

Media Talks

Knowledge Arena

Be our guest to browse the Knowledge Arena by Digital Filings and widen your knowledge-base. 

Digital Filings always strive to enhance the understanding of our patrons on the Nation's consistently modifying compliance environment. Our well-informed team of partners has diligently compiled numerous articles, guides, videos, and much more that you can browse anytime at your ease.

Easy Registration

Experts at Digital Filings can proficiently help in registering your sole proprietorship firm, either by getting you a GST / VAT Number, Service / Professional Tax Registration, a Shops & Establishments Act Registration, a Micro, Small & Medium Enterprises (MSME) Registration, or an Import-Export Code.

Supportive Team

The team of well-informed professionals at Digital Filings is just a phone call away to address every concern / query about the registration of your sole proprietorship venture. We will, however, put our best to make sure that all your questions are well-answered even before they strike in your mind.

Expert Support

Experts at Digital Filings precisely understand all of your requirements and strive to ensure that all the desired documents are in place so that you can effectively align yourself with every legal / administrative interaction. We will also provide you complete clarity on the process to set genuine expectations.