Close the LLP

Closing an LLP

It is necessary for directors of an LLP to file a resolution with the Registrar of Companies within a period of 30 days from the resolution being passed. Two partners must attest to the statement of assets and liabilities after the closure of accounts, until the date of dissolution of the LLP, within 15 days of passing the resolution. There must be a report on the valuation of the company’s assets. At this point, the majority of partners need to declare that the LLP does not have any debts or that the company is able to pay all debts within one year from the date of closing of the LLP.

LLPs or Limited Liability Partnerships are one of the business structures you can choose from when registering a business. If you have registered your company as an LLP, then you are required to file mandatory returns regardless of whether it does business. You will be liable for penalties under the LLP Act if you fail to file the returns, and your partners will be liable as well. Thus in the case of LLP, filing returns becomes mandatory.

If you have adhered to all the conditions as per the LLP Act and your partners have done everything on time, then you must know that the closure of an LLP can take up to two months.

How to Close LLP in India

Step 1: Resolution

In order to dissolve the company, a special resolution has to be passed to take the approval of all or ¾’th of the partners of the company.

Step 2: Form No. 1

Form no.1 is filed with the MCA or Ministry of Corporate Affairs within 30 days of passing the resolution with its copy. 

Step 3: No Debt Declaration

A minimum of two members must openly declare that the LLP has no pending debits, and in case it has debts; they will be paid and cleared within a year from the date of dissolution.  

Step 4: Form 4 & Value of Assets

Within 15 days of filing the forms and a statement declaring that the LLP is not closing with the intent of fraud or cheating, Form No. 4, along with a report of the value of the LLP’s assets, must be submitted to the registrar.

Step 5: Creditor Consent

A minimum of ⅔’rd of company creditors have to provide consent regarding the winding up of the LLP. It is mandatory to take the consent of the creditors.

Step 6 – Filing Form 6

An advertisement must be posted in the local newspaper within 14 days of receiving the partner’s consent. A liquidator is appointed in case of remaining assets and liabilities in the name of LLP, and the statement must be filed in Form 6.

Step 7: Filing Form 9

The company’s final account statement and Form 9 must be prepared and submitted to finalize the closure of LLP.

What are the documents necessary from Designated Partners For Closing An LLP?

In order to close the LLP, the following documents must be submitted by partners:

• PAN Card of Partners
• Aadhaar Card of Partners
• Latest Address Proof of Partners
• Consent letter signed by the Partners

Frequently Asked Questions