How to Close a LLP in India : Procedure for winding up LLP
LLP or Limited Liability Partnership is a partnership (generally in a business) in which all the members (partners) have limited liabilities. Generally, an LLP is set up under legal terms and documents. There is a defined procedure as to how you can register your LLP. There are certain benefits to be in an LLP but like everything, it has its own disadvantages too. Sometimes, it so happens that people are confused as to how to get your LLP registered, however, most of them don’t even know that there is a defined procedure as to how you can close an LLP. Described below, to remove such misconceptions is a procedure with which you can close LLP in India.
The LLP Act, 2008 provides certain necessary guidelines when you want to close an LLP.
Ways to close LLP
- Declaring your LLP Defunct
- Winding up your LLP
Our Company Registration package includes the following:
- DSC for one director and DIN for up to three directors
- Drafting of MoA & AoA
- Registration fees and stamp duty
- Company Incorporation Certificate
Step 1 : Passing of Resolution
Once you decide the Close an LLP in India then you have to pass a resolution by the at least 3/4th of the Partners.
Step 2 – Form 1 Filings
After the passing of a resolution, you have to file form 1 with the resolution copy within the 30 days.
Step 3 – Declaration of the Debt
In the third step LLP have to make a declaration that LLP has no debt liability or if have any then it will have sufficient amount so they can be paid within the 1 year from the commencement of the winding up. Its has prepared by the majority of the partners (minimum 2).
Step 4 – Form 4 & Value of the Assets
In the fourth step, the above forms an affidavit has been submitted to the registrar within 15 days of the resolution along with the forms and a statement saying that such winding up is not being done to defraud anyone, form no .4 and a report of the value of the assets of the LLP. You can read here about the Annual Compliance for the LLP which also included these Forms.
Step 5 – Obtain consent from the Creditors
In the fifth step if you have the creditors in your LLP then you have to obtain the consent from the creditors and it’s given by at least ⅔ of the unpaid creditors.
Step 6 – Filings and Appointment of Liquidator
File the consent from the creditors with the appropriate timelines. You have to provide advertisement also in the local newspaper within 14 days from the receiving creditor’s consent. In case the LLP has liability increasing and assets the appointment of a liquidator is required and a liquidator’s statement in form 6 needs to be filed.
Step 7:- Finalization of the Accounts of LLP.
In the sixth step, you have to prepare the finalization of the accounts and submit along with the form 9. So once form 9 has been filed, all the formalities have been completed. You can Download LLP Closure Rules and Winding Up Rules Here from the official MCA Website So this is the simple procedure to Close an LLP in India. Hope you like this article. If you have any Query regarding the Closure of the LLP then just place a request on myonlineca and get legal solutions at your fingertips.