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WIND UP LLP{F}

LLP or Limited Liability Partnership is a new form of business entity introduced in India through the LLP Act, 2008. Winding up of the business is the procedure where the selling of business assets and paying off to creditors take place. In even of any surplus profit or assets, those are distributed to the partners of the LLP in accordance with the Limited Liability Partnership Agreement.

To begin the process for winding up of LLP, a resolution for winding up of LLP must be passed and filed with the Registrar within 30 days of passing of the resolution. On the date of passing of resolution of winding up of LLP, the voluntary winding up shall be deemed to commence.

  1. The important advantage of an LLP is that an LLP is easier to start and manage and the process has lower formalities.
  2. It has a low cost of registration as compared to a Company.
  3. LLP is seperate body .
  4. LLP has no minimum requirement for capital.
  5. The partners would have limited liability to their agreed contribution in the LLP.
  6. No requirement of compulsory Audit.
  7. Annual compliance is lesser than companies.
  8. Non-applicability of MAT.
  9. Profits can be distributed without any cost of Distribution Distribution Tax (DDT).
  10. Audit not mandatory.

Less credibility

Partners not consulting

Transfer of interest

Lack of recognition

  1. There is no security interest in its assets subsisting or in force at the time of application
  2. The partners of the LLP to which it comprise all the shareholders of the Company and no one else.
  3. No e Forms should be pending for payment or processing in respect of the Company.
  4. No open (unsatisfied) charges should be pending against the Company.
  5. At least one balance sheet and annual return should have been filed by the Company after its incorporation

All about Limited liability partnership

WIND UP LLP

LLP or Limited Liability Partnership is a new form of business entity introduced in India through the LLP Act, 2008. Winding up of the business is the procedure where the selling of business assets and paying off to creditors take place. In even of any surplus profit or assets, those are distributed to the partners of the LLP in accordance with the Limited Liability Partnership Agreement.

To begin the process for winding up of LLP, a resolution for winding up of LLP must be passed and filed with the Registrar within 30 days of passing of the resolution. On the date of passing of resolution of winding up of LLP, the voluntary winding up shall be deemed to commence

Disadvantages of wind up LLP
Not covered all states- Due to various tax benefits and provisions many states restricts the formation of LLP in their states. This leads to a disadvantage as many states dona  allow their entrepreneurs to form this.

Less credibility- One of the major demerits of Limited Liability Partnership is that many people do not consider this as a credible business. People still trust more on company or partnerships.

Partners not consulting- Partners of the Limited Liability Partnership dona consult each other in case of decisions and agreement.

Transfer of interest- Though interest and ownership can be transferred but it usually takes long procedure. Various formalities are required to comply with the provisions of the act.

Lack of recognition- As LLP is introduced in India in 2009 only it is not recognized by all. Due to its less recognition, it leads to hindrance in smooth functioning of the firm. People are not likely to form LLP

Basic

INR 1,500/-

One Time Fee

  • GST Registration
  • MSME Registration
  • Bank A/c.

Service Provide Within 7 Days

Standard

INR 11,999/-

One Time Fee

  • GST Registration
  • Shop & Establishment Registration
  • MSME Registration
  • Trade Mark Registration
  • Logo Design
  • Opening Bank A/c.

Service Provide Within 15 Days

Premium

INR 11,999/-

Yearly Fee

  • Yearly GST Compliances
  • Income Tax Return

Services Provided Before the Due Date

Frequently Asked Questions

A Limited Liability Partnership i.e. LLP is a partnership where some or all the partners have limited liability. LLP is an alternative corporate business form that it gives the benefits of limited liability of a company and the flexibility of a partnership.

An LLP need to be closed down on the following conditions:

  • LLP is inoperative from the date of incorporation or inactive for a period of at least one year
  • LLP does not have any assets / liabilities as on the date of application

By following the below given steps you can close your LLP by filing Form 24:

  • Step 1:Cease Commercial Activity
  • Step 2:Close Bank Account(s)
  • Step 3:Prepare Affidavits & Declaration
  • Step 4:Prepare Documents
  • Step 5:File Any Pending Documents
  • Step 6:Obtain Chartered Accountant Certificate
  • Step 7:File LLP Form 24

In case the LLP wants to close down its business or where it is not carrying on any business operations for a period of one year or more, it can make an application to the Registrar of Companies for declaring the company as defunct and removing the name of the LLP from its register of LLP’s. The name of LLP can be struck off by the registrar or by the LLP in e-Form 24 with the consent of all partners.

On receiving the application, the registrar would send a notice to the Limited Liability Partnership and all its partners, of his intention to remove the name of the LLP from the register and requesting them to send their representations along with copies of the relevant documents, if any, within a period of 30 days from the date of the notice.

On completion of the time mentioned in the notice, if there are no adverse representations from LLP partners or general public, the registrar could if satisfied, strike off the LLP name from the register and publish a notice in the official gazette.

 An LLP can strike off its business by adopting any of the following two ways:

  • Declaring LLP as Non-functioning: When ana LLP is not carrying the business for one or more years or it wants to close down its business, it can make an application to the registrar to declare the LLP as defunct and remove its name.
  • Winding up:
    • Voluntary winding up: When partners decides between themselves to wind up the business
    • Compulsory winding up: Upon failing to comply with some conditions the LLP may be compulsorily wound up by the tribunal.

To strike off the name of the LLP, an application is required to be made in e-Form 24 with following below mentioned documents:

  • A statement of account disclosing nil assets and nil liabilities, certified by a Chartered Accountant in practice made up to a date not earlier than thirty days of the date of filing of Form 24.
  • Copy of acknowledgement of latest Income tax return- Self Explanatory.
  • Copy of the initial limited liability partnership agreement, if entered into and not filed, along with changes thereof.
  • Copy of Detailed Application- Mention full details of LLP plus reasons for closure.
  • Copy of Authority to Make the Application- Duly signed by all the Partners.
  • An affidavit signed by the designated partners, either jointly or severally, to the effect:
    • That the Limited Liability Partnership has not commenced business or where it commenced business, it ceased to carry on such business from ………….(dd/mm/yyyy);
    • That the limited liability partnership has no liabilities and indemnifying any liability that may arise even after striking off its name from the Register;
    • That the Limited Liability Partnership has not opened any Bank Account and where it had opened, the said bank account has since been closed together with certificate(s) or statement from the respective bank demonstrating closure of Bank Account;
    • That the Limited Liability Partnership has not filed any Income-tax return where it has not carried on any business since its incorporation, if applicable.

The following companies do not qualify for the provision of strike off:

  • Listed companies.
  • Companies delisted on account of non-compliance of listing regulations, listing agreement or any other statutory laws.
  • Vanishing companies.
  • Companies which have been listed for inspection or investigation – if such directive is being carried out/pending/completed but the prosecutions concerning such inspection or investigation are pending in a Court of law.
  • Companies which haven’t yet responded to notices of select provisions.
  • Companies which hasn’t furnished the follow-up instructions on any report under section 208 of the Act.
  • If the prosecutions related to the above two provisions are pending in a Court of law.
  • Companies against which any case for prosecution is pending in a Court of law.
  • Companies, whose application for compounding is pending before the competent authority for compounding the offences committed by it or any of its officers in default.
  • Companies accepting any public deposits which are outstanding.
  • Companies having any charges which remain to be satisfied.
  • Companies registered under Section 25 of the Companies Act, 1956or Section 8 of the Act.

E-Form 24 is used for making an application to the Registrar of Companies for striking off the name of the LLP.

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