Closing of LLP is a formal procedure of deleting the LLP’s name from the records of the Ministry of Corporate Affairs (MCA) through a formal procedure. Partners should make sure that all legal requirements are fulfilled and the LLP does not have any pending liabilities prior to applying for closure through an online process. Get clarity on the ways of closure, step-by-step procedure, checklists, documents needed, fees, advantages and some popular FAQs.
Abhinav Suresh Advocate CA handles the complete process of closing an LLP right from preparing required documents to filing with the MCA and liaising with authorities. Our experts strictly follow the Companies Act of 2013 and other laws, offering start-to-finish assistance for the hassle-free, efficient, and smooth closure of an LLP.
LLP closure refers to the process of striking off the LLP’s name from the records of the Ministry of Corporate Affairs (MCA) by way of a formal process. When partners want to close an LLP online, they need to make sure all legal formalities are complied with, and the LLP has no outstanding liabilities. After the closure gets approval, the LLP stops existing as a legal entity, and its name is struck off permanently from the MCA records.
The process of closure begins with the nominated partners and all the partners consenting to wind up the LLP under the first LLP agreement or the most recent LLP agreement. This is usually done when the LLP has ceased its commercial activities or is not a revenue-generating business anymore. Firms which have started business and carried on in the limited liability partnership LLP form should ensure that all operations, including those relating to the bank account or LLP’s bank account, are wound up in a suitable manner.
The LLP has to pay all the dues, close the mentioned bank account, and make an account showing nil assets if it is required. Filing the most recent income tax return or income tax return showing the closing finances of the financial year is required. Also, annual returns and submission of annual returns up to the closure date should be done to prevent issues of non compliance. Any pending liabilities should be taken care of before the closure.
An LLP can be closed in two different methods in India usually involving voluntary closure or strike-off by filing Form 24 with the Registrar of Companies pretty quickly. LLPs having remained dormant for a year or more or not having started operating since being incorporated are subject to this rule. An LLP may face compulsory strike-off by ROC for prolonged non-compliance such as failing miserably to file crucial annual statutory returns. Here is a detailed breakdown of the same:
This is the fast-track exit option under Rule 37 of the LLP Rules, 2009, allowing LLPs to apply for closure by submitting Form 24 to the Registrar of Companies (ROC).
Eligibility Criteria:
The LLP must be inactive for at least one year or from the date of incorporation.
The LLP should have no outstanding liabilities or debts.
All partners must consent to the closure.
This method is ideal for entities that are dormant and seek a simplified LLP closure via Form 24, resulting in the removal of the LLP’s name from the MCA database through ROC LLP closure.
Voluntary winding up is suitable when the LLP is still active but wants to shut down its business legally — especially if it has assets or liabilities to settle.
Process Overview:
All partners must pass a resolution to wind up the LLP.
A liquidator is appointed to manage the process of paying off debts and distributing assets.
A petition is filed before the National Company Law Tribunal (NCLT) for final approval.
After completion, the LLP is dissolved and struck off the MCA records.
This is a more structured LLP liquidation process and ensures legal compliance when exiting an LLP with financial obligations.
The NCLT may initiate compulsory winding up of an LLP under certain circumstances, such as:
Involvement in fraudulent activities
Insolvency or inability to pay debts
Continuous non-filing of annual returns or statements
Acting against the sovereignty and integrity of India
Based on a ROC petition citing violations
LLP closure by tribunal is enforced when the LLP defaults in its obligations or conducts unlawful operations, ensuring regulatory action and legal resolution.