The MCA (Department of Corporate Affairs) changed the rules for LLPs by introducing Form 24. This makes it easy to dissolve an LLP by filing a name removal request. Section 63 of the Limited Liability of Partnerships Act 2008 describes the liquidation procedure for an LLP. The liquidation/dissolution referred to can be voluntary or court-based. Closure of such a business can begin when there has been no business for more than one year. In the above scenario, her dormant LLP may apply to her ROC to declare the company extinct and remove the LLP’s name from her LLP’s register. In this article, we will try to understand the process of closing an LLP in India.
Process to close LLP in India
Unlike company liquidation, LLP closure is not a legal purpose. Affiliates file indemnification forms and obligations, settle all debts, and continue to pay LLP debts without affiliates contesting or filing formal forms with the ROC to proceed with closure It’s important to note that you need The registrar closes the LLP after verification. In the event of a liability conflict, the partner is personally liable.
Therefore, it is advisable to set off the debt and retain clearance certificates from creditors and shareholders in order to be free from future debt.
Before filing LLP E-Form 24
- bank account closure
- hibernation
- legal statement
- For overdue returns, please complete Forms 8 and 11
- Judge’s certificate
- form 24
- Punishment Other
Bank Account Closure – All bank accounts associated with the LLP must be closed and confirmations must be provided to the registrar prior to requesting closure.
Dormant Status – An LLP must stop trading for a year or more to announce a status of deferral for closure.
Statutory Declaration – The affidavit must jointly and severally or jointly and severally declare the inability or failure of the business and other activities related to its promotion. However, the LLP must assume responsibility and position to submit to her ROC when filing Form 24.
In addition, you must attach the LLP’s income tax return and LLP certificate (applies to active LLPs only). Note – Simply submitting the form gives you the right to settle the debt and the partner will be responsible for any debt incurred thereafter.
Filing up Form 8 and 11
Form 8 – Accounts and Ability to Pay – must be submitted within 30 days and before 6 months after the end of the fiscal year.
Form 11 – Annual Return – must be filed within 60 days after the end of the fiscal year.
Note – Submitting the form is a mandatory process regardless of the LLP sale.
Submission requirements
LLPIN (Limited Liability Partnership Identification Number)”
Shareholder Contribution Statement
Payment of Fees (Form 4, if applicable – Form 4 covers appointments, terminations and changes of designation.)
Penalty for not filing Form 11 – He will be charged a penalty of INR 100 per day until the filing date.
Certification by Auditor – After preparation and review of all documents prepared for submission, the auditor is required to certify Zero Assets and Zero Debt status no less than 30 days prior to his closing of such LLP. I have. Submission of LLP Form 24 – Form 24 can be accessed through the MCA Portal and submitted to cancel the LLP’s name. The application must include the following information:
- LL PIN
- Name of LLP
- Registered LLP Address
- Reason for this request – 200 words
- ITR updates and status
- A copy of the power of attorney duly signed by all partners to submit the application
- Copy of income tax return
- zero statement
- Signed Affidavit of Designated Partner.
- Punishment Other
- Late payment penalty is INR 100 per day. Forms 11 and 8 are not required to be filed for the dissolution of a dormant LLP.
Conclusion
Form 24 completed by the LLP at the registrar. Submissions are subject to registrar approval. After reviewing all documents, if the registrar is satisfied, file a public opposition by filing the LLP’s name in the Federal Register. If there are no objections, the registrar will remove the name.