Limited Liability Partnership (LLP) is a widely preferred business structure due to its flexibility and limited liability benefits. However, not every venture continues forever. Whether it’s due to market conditions, change in business goals, or financial reasons, entrepreneurs may decide to shut down their LLP. That’s where the LLP closure process comes in.

In this article, we’ll walk you through the complete procedure for the closure of company when it comes to LLPs, focusing on the use of Form 24 and the documents required for a smooth exit.

What is LLP Closure?

According to Rule 37 of the LLP Rules, 2009, an LLP that has become defunct (i.e., not operating or conducting any business for at least one year) can apply for LLP closure by filing Form 24 with the Registrar of Companies (ROC).

Let’s understand how to close an LLP company, step by step.

How to Close an LLP Company?

Here’s a simplified, human-centric breakdown of the LLP closure process:

Step 1: Cease Business Operations

Before applying for LLP closure, ensure that the LLP has either not started business or has already stopped all its commercial activities. Only LLPs that have ceased business operations are eligible to file Form 24 for closure.

Step 2: Close All Bank Accounts

Make sure to shut down all bank accounts associated with the LLP. Collect a bank closure confirmation letter from the respective banks, as this document is required during the closure of company process.

Step 3: Prepare Affidavits and Declarations

Every partner in the LLP must submit an affidavit (either jointly or separately) confirming:

• The LLP has not carried on any business since incorporation or ceased business from a specific date.
• The LLP has no liabilities or creditors.
• The partners agree to indemnify any liabilities that may arise post-closure.

This is a critical part of the LLP closure process to assure the authorities of no outstanding obligations.

Step 4: Collect Necessary Documents

Before filing, gather the essential documents such as the LLP agreement, affidavits, income tax return acknowledgement (if filed), and proof of bank account closure. We’ll cover the complete list later in this article.

Step 5: File Pending Returns and Agreements

If the LLP hasn't filed the LLP agreement within the stipulated 30 days from incorporation, it must be done before filing Form 24.

Also, any overdue compliance filings (Form 8 and Form 11) up to the financial year when business operations ceased must be submitted.

Step 6: Get a Chartered Accountant’s Certificate

Prepare a statement of accounts showing NIL assets and NIL liabilities, certified by a practising Chartered Accountant. The date of this certificate must be within 30 days of filing Form 24. This ensures the LLP has no financial obligations left.

Step 7: File Form 24 for LLP Closure

Once all the paperwork is ready, submit Form 24 along with the required documents to the Ministry of Corporate Affairs (MCA). If everything is in order, the ROC will publish a notice of striking off the LLP from the official records, effectively completing the closure of company.

Documents Required for LLP Closure

To ensure a smooth LLP closure, you’ll need to submit the following:

• Application for closure of company via Form 24
• Consent of all the partners
• Statement of accounts with NIL assets/liabilities certified by a Chartered Accountant
• Affidavit from all partners confirming no business activity
• Copy of the latest Income Tax Return acknowledgement (if applicable)
• Initial LLP Agreement and any supplementary agreements

Make sure these documents are complete and up to date before proceeding with the application.

When Can You Apply for LLP Closure?

You can initiate the LLP closure process if the LLP meets any of the following conditions:

• Business was never started after incorporation
• The LLP has remained inactive for more than one year
• The LLP has gone bankrupt or insolvent
• There is a court order mandating the closure of company

Final Thoughts

The decision to close an LLP might not be easy, but following the proper legal route makes the process smooth and hassle-free. Filing Form 24 with accurate documentation helps you exit gracefully and avoid any future legal or financial complications.

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