Closing an LLP
Striking out the name is the most straightforward method of ending a defunct Limited Liability Partnership (LLP) that has no assets or liabilities. In order to settle the LLP’s finances, the chosen partners must first sell any assets and clear any debts. Since the LLP has no assets, obligations, or public complaints, the Registrar will close it.
Overview
A partnership formed and registered in accordance with the Limited Liability Partnership Act of 2008 is known as a limited liability partnership.
There are two ways for a limited liability partnership (LLP) to dissolve:
The LLP has been declared defunct.
An LLP may request that the Registrar declare the LLP defunct and remove its name from the register of LLPs if it plans to shut down or if it has not conducted any commercial activities for a year or more.
To have the LLP’s name removed, an E-Form 24 must be submitted in accordance with clause (b) of subrule 1 of Rule 37 of the LLP Rules 2008.
Benefits of Closing an LLP
Free of compliance
Since the LLP would be dissolved nonetheless, there is no need to stay on course to remain legal.
No Penalties
The LLP doesn’t have to worry about being in a position where they have to pay the penalty charge for the ignored causes once the closure is started.
Proper business
The resources can be put to greater use if the company is not making money.
All leases will be terminated.
During the winding-up process, a company or entity that has engaged into a lease for a predetermined period of time must terminate all of the terms and conditions of the lease. If a penalty is due, the proceeds from the sale of assets are deducted.
Checklist/Document Requirements
Here are the same points rewritten with different wording, keeping them professional and clear:
Affidavits executed by all Partners
Letter of Authorization
Written Consent from all Partners
Declarations submitted by all Partners
Indemnity Bonds furnished by all Partners
Statement of Accounts reflecting Nil Assets and Liabilities, duly certified by a Chartered Accountant
Copy of acknowledgment of the most recent Income Tax Return filedOriginal LLP Agreement together with all applicable Supplementary Agreements, if any
Process of Closing an LLP
Step 1: Close the LLP’s bank account
Step 2: If you have any assets, sell them.
Step 3: Pay off any outstanding debts.
Step 4: Obtain each partner’s written approval to strike off
Step 5: Drafting all the paperwork needed to close the LLP
Step 6: Providing the Registrar with Form 24
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