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The closure of a Limited Liability Partnership or LLP is the legal process of terminating the LLP and removing its name from the data of the Ministry of Corporate Affairs. This process is also known as the strike-off or winding up of an LLP and can be closed either by a compulsory winding-up or voluntarily by regulatory authorities.

The following documents are required to execute the closure process of an LLP –

• A photocopy of the recent Income Tax Return acknowledgment.
• Affidavits by all LLP partners (individually or jointly)
• An Indemnity Bond towards liability that partners may have to experience even after removing the LLP name.
• Any other important documents that may be required by the ROC
• Application for the closure of an LLP (Form 24)
• Consent in written format from each partner
• Digital Signature Certificate of Partners
• The statement of company Accounts that should be verified by a professional CA. It should reflect zero liabilities and assets of the LLP, and it should not be earlier than 30 days before the date of filing the closure application.

The following documents are required to execute the closure process of an LLP –

• A photocopy of the recent Income Tax Return acknowledgment.
• Affidavits by all LLP partners (individually or jointly)
• An Indemnity Bond towards liability that partners may have to experience even after removing the LLP name.
• Any other important documents that may be required by the ROC
• Application for the closure of an LLP (Form 24)
• Consent in written format from each partner
• Digital Signature Certificate of Partners
• The statement of company Accounts that should be verified by a professional CA. It should reflect zero liabilities and assets of the LLP, and it should not be earlier than 30 days before the date of filing the closure application.

1. Voluntary Closure (Strike Off)

When the LLP is not operating its business activities for at least one year and has no pending liabilities, it can apply for closure under Section 37(1) of LLP Rules, 2009.

Conditions for Voluntary Closure

1. The LLP should have had inactive business for one year or more.
2. All financial liabilities, such as dues, loans, taxes, etc., should be cleared.
3. Consent from all LLP partners is required.

Process for Voluntary Closure

1. Consent from all partners should be passed in which they agree to close the LLP.
2. The LLP should close all its bank accounts for starting the closure.
3. The LLP should submit Form 24 to the Ministry of Corporate Affairs, including –  a. Affidavit & indemnity bond from partners. b. Consent of all designated partners. c. Copy of IT return & NOC from creditors (if applicable). d. Statement of assets & liabilities (certified by a Chartered Accountant).
4. After submitting the form, the MCA will verify it, and after verification, the ROC will remove the LLP from its register.

2. Compulsory Closure by ROC

The ROC can initiate the closure of an LLP if –

• The LLP has not filed yearly returns for two consecutive years or is not operating any business.
• It is involved in fraudulent actions.

In the above-mentioned situation, the ROC will publish a notice to the LLP and, on being unable to respond, it proceeds with the closure.

3. Winding Up by Tribunal (NCLT)

The National Company Law Tribunal or NCLT will order an LLP to wind up in the following situations –

• When the LLP is unable to pay its debts.
• •The LLP partners have been involved in fraud or carried on business illegally.
• The LLP has remained inactive for a significant period without any valid reason.
• When the Tribunal finds appropriate reasons to close an LLP

1. A petition should be filed for winding up of an LLP.
2. The appointment of a liquidator is essential to selling assets and clearing liabilities.
3. The remaining funds should be distributed among the partners. (if any)
4. The final dissolution order should be passed.