- Lawyer Mr. Shaman Jain
- Skills Accounting
- CATEGORY Closure, Compliances
ABOUT THIS PRACTICE
Since LLP is a different legal entity, it is created by following a legal proceeding hence and when it comes to its termination there is a formal legal procedure to be followed.
An LLP may be shut through winding-up or through striking off its name from Register of LLP. The winding-up may prove to be an expensive or time-taking affair for many LLPs as it involves approval from Tribunals and involvement of Liquidators. Thus, the LLP that has been non-functional since its formation or for more than a year, may advance for the easy way of exit i.e. Strike-off. After the publication of notice by Ministry the LLP will be declared struck-off. Once it is struck-off, the existence of LLP in eyes of law is terminated .
Reasons For Dissolution of LLP In India
- To avoid compliance and filing responsibilities for the LLP’s which are not active: The statutory compliances of maintaining an LLP are more than the cost of winding up. If the LLP is in-active it’s better to wind up than fulfil the compliances.
- To avoid fines and penalty for late filing, it is better to officially Wind Up LLP’s which are inactive: All LLPs registered in India are supposed to file the annual returns and statement of accounts for each Financial Year regardless of annual revenue or profit disregard of its working. LLP that hasn’t opened a bank account or started business activity would have to file the following filings each year to maintain LLP compliance and avoid penalty.
- PAN Card: All partners are required to submit their and the firm’s PAN number as identity proof.
- LLP Agreement along with any modifications made therein Address Proof of firm: If the registered office place is rented, rent agreement and one utility bill (electricity bill, water bill, property tax bill, gas receipt etc.) have to be submitted. Also, NOC from landlord will be submitted.
- Accounting Information: The financial statement of the LLP with Copy of acknowledgement of latest INCOME TAX RETURN.
- NOC from Creditors: NoC for strike-off to be obtained from secured creditors, if any
- Statement of assets and liabilities of the LLP certified as true and correct by auditor/chartered accountant in practice.
Pre-Requisites for LLP Strike Off
- Non-operative Stage: The LLP must discontinue its operations for a minimum period of 1 year
- Fully Complied: The LLP must be fully complied with Annual Compliance requirement and more
- Closure of Bank Account: The LLP must close all the bank accounts opened in the name of the LLP
Process Of Winding Up Of LLP
- Discussion and collection of basic Information
- Provide Required Documents
- Review of the details and documents furnished
- Drafting of necessary resolutions
- Drafting of the affidavit, indemnity bond, and other documents
- Provide duly executed affidavit & indemnity bond
- Provide signed documents after review
- Preparation of applications for online filing
- Filing of LLP Form 24 with MCA
- Government processing time to approve strike-off
- The notice of strike-off to be published by MCA after approval