Close the LLP
The penalty for LLPs defaulting in filing of any statutory return is Rs.100 per day, without any maximum limit.
The Ministry of Corporate Affairs has recently amended Limited Liability Partnership Rules, 2009 by introducing the Limited Liability Partnership (Amendment) Rules, 2017 with effect from 20th May, 2017. With this amendment, LLP Form 24 has been introduced by the MCA and it is now possible to easily close a LLP by making an application to the Registrar for striking off name of LLP. In this article, we look at LLP Form 24 and the procedure for striking off name of LLP in detail.
Winding Up a LLP
The penalty for LLPs defaulting in filing of any statutory return is Rs.100 per day, without any maximum limit. Hence, its is often best to windup dormant LLPs so that there is no requirement to file LLP Form 11, LLP Form 8 and Income Tax Return for the LLP each financial year to maintain compliance and avoid penalty.
Before the introduction of the Limited Liability Partnership (Amendment) Rules, 2017, the procedure for winding up a LLP used to be long and cumbersome. However, with the introduction of LLP Form 24, the procedure has been made easy and simple.
Hence, its best for Entrepreneurs having dormant or defaulting LLPs that are accruing penalty to use this opportunity to close the LLP.
If you are planning to close the LLP or Limited Liability Partnership, then you have to follow the process mentioned below:
- Closure of business operations- When you are planning to close the LLP, then you must first close the current business operations.
- Close the bank account- Once you have closed business operations
- Preparing the closing statement of accounts- The next step is to close the statement of accounts.
- Application to ROC-LLP Form 24- At this stage, the partners of LLP are required to file an application to the registrar along with an affidavit and fees along with the consent of all the partners.
In case you are unsure of the steps and process of closure of LLP, then you can connect with Vakilsearch for assistance. We have a team of qualified professionals who will help you with the same.
If the LLP fulfills the following condition, it can file an application for striking off its names from the register of LLP:
- The LLP must have a PAN
- The LLP should be inactive for a period of at least one year or non-operational from the time of incorporation
- There should be no live bank account at the time of application
- The LLP should have filed the latest IT returns.