Winding Up of LLP: Legally Closing Your Limited Liability Partnership
A Limited Liability Partnership (LLP) offers a flexible business structure with limited liability protection and simplified compliance. However, when an LLP completes its business objectives, becomes inactive, or faces operational challenges, winding up is the appropriate legal process to close it down formally.
Winding up an LLP ensures the proper settlement of accounts, clearance of liabilities, and dissolution of the entity in compliance with the LLP Act, 2008 and guidelines issued by the Ministry of Corporate Affairs (MCA).
Types of LLP Winding Up
- Voluntary Winding Up
When the partners mutually decide to close the LLP and it has no liabilities or can pay them in full, a voluntary winding up can be initiated. - Compulsory Winding Up
The National Company Law Tribunal (NCLT) may order winding up under circumstances such as:- The LLP is unable to pay its debts.
- The LLP has acted against national interests.
- The LLP is not carrying on any business for two or more years.
- It is just and equitable to wind up the LLP.
Conditions for Voluntary Winding Up
- Approval from at least 3/4th of the partners.
- The LLP must clear all liabilities or declare solvency.
- No pending litigation or, if any, proper settlement undertaken.
Procedure for Voluntary Winding Up
- Resolution for Winding Up
A special resolution is passed by partners to initiate the winding-up process. - Declaration of Solvency
Designated partners must declare that the LLP has no debts or can repay them within a specified period. - Appointment of Liquidator
A liquidator is appointed to settle the accounts, realize assets, pay liabilities, and distribute surplus, if any. - Public Notice
Publish the winding-up resolution in the official gazette and a local newspaper within 14 days. - Final Accounts and Report
The liquidator prepares final accounts and submits a report detailing asset realization and liability settlement. - Filing with ROC
File Form LLP-24 along with necessary attachments like final accounts, resolution, and liquidator's report. - Dissolution by ROC
After verifying all documents, the ROC issues a formal order for dissolution.
Documents Required
- LLP agreement and latest financial statements
- Partners' resolution for winding up
- Declaration of solvency (if applicable)
- Liquidator's appointment letter
- Newspaper publication proof
- Final statement of accounts
Consequences of Not Winding Up Properly
- LLP remains active and liable to file annual returns
- Accumulation of late filing penalties
- Legal action from MCA for non-compliance
- Negative impact on partners' compliance records
Our LLP Winding Up Services
- Advisory: Determine the right mode of winding up based on your LLP's status.
- Document Preparation: Draft resolutions, declarations, and public notices.
- Filing Support: File Forms LLP-24 and other required submissions with the ROC.
- Liaison with Authorities: Communicate with ROC and other regulatory bodies.
- Final Closure: Ensure official dissolution and documentation.
Why Choose Us?
- Experts in LLP Act and winding-up regulations
- Fast, reliable, and compliant closure process
- Transparent pricing with complete confidentiality
- Personalized service to suit your LLP's needs
Close Your LLP the Right Way
Whether your LLP is inactive or has completed its objectives, winding it up the right way ensures peace of mind and legal clarity. Contact us today to initiate a compliant and stress-free LLP closure.
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