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  • Writer's pictureCS Joseph Sequeira

How to easily close a dormant Limited Liability Partnership

The  Central Government had passed the Limited Liability Partnership Act, 2008 to encourage the growth of partnerships with limited liability feature in the business sector especially for the growing Micro, Small & Medium enterprises (MSMEs) in India.


However over the years, there were many LLPs who either failed to take off or run profitability and therefore defaulted in meeting their business and financial commitments as per law.


Dormant companies are liable to be struck off the Register of LLPs for non-compliances like failure to file annual audited financial statements or the Annual Return of the Company for 3 consecutive years.


The consequences for default were very severe. The penalty for defaulting LLPs for non- filing of any statutory return is Rs.100 per day, without any maximum limit.


Therefore the best remedy for a promoter of a dormant company wad to windup a dormant LLP so that there is no requirement to file LLP Form No. 8 & 11 and Income Tax Return for the LLP each financial year to maintain compliance and avoid penalty.


The Ministry of Corporate Affairs has recently amended the Limited Liability Partnership Rules, 2009 by introducing the Limited Liability Partnership (Amendment) Rules, 2017 with effect from 20th May, 2017. With this amendment, it is now possible to easily close a LLP by making an application to the Registrar for striking off name of LLP.


Procedure for closing a LLP


1: Cessation of Commercial Activity

It is a pre-condition that the Applicant LLP should have never commenced business or has ceased to carry out any commercial business.


2: Closure of Bank Account/s

The Applicant LLP must close its bank account/s opened in its name and obtain a letter evidencing closure of the bank account in the name of the LLP from the Bank.


3. Affidavit declaring the cessation of business activities. All the Designated Partners of the LLP must first execute an affidavit, either jointly or severally, that the Limited Liability Partnership has ceased to carry on commercial activities from (Date) or has not commenced business.


4. Thus, the LLP Partners must jointly declare that the LLP has no liabilities and undertake to indemnify any liability that may arise after striking off its name from the Register. The liability of the Partners would not be extinguished even after closure of a LLP while using Form LLP 24.


5. The LLP must also file its Income Tax return showing no dues owed to the Central or State Government or other creditors. In case the LLP has

not carried on any business activity nor has filed any income tax return, then this is not required. Else, a copy of the acknowledgement of the latest Income-tax return filed must be filed with the application for closing the LLP.


6. A notarized copy of the LLP deed must be attached to the application.


7. Obtain and attach a Chartered Accountant Certificate and Financial Statement of Accounts in the prescribed format, disclosing NIL assets and NIL liabilities, up to a date not earlier than 30 days of the date of filing of Form 24.


8. Filing of Pending ROC documents with filing fees. The LLP has to file all pending ROC documents like LLP agreement, overdue returns in Form 8 and Form 11 upto the end of the financial year in which the limited liability partnership ceased to carry on its business operations, must be filed before filing LLP Form 24.


9: Filing LLP Form 24 with fees.

Lastly, one has to download and file LLP Form 24 to strike off name of LLP. If approved, the concerned Registrar of Companies will issue a notice to be published on the MCA website announcing the striking off of the LLP.


The Writer is a Practicing Company Secretary with more than 30 years in project consultancy. He can be contacted for queries or assistance at the following address:


CS Joseph Sequeira

B.Com, LL.B, FCS, MICA

Practicing Company Secretary

Delfina Apts, Opp. Rosary Church, Caranzalem, Panaji, Goa - 403004

Email : josephcf@yahoo.com

Phone: +91 8380087153.

Website: www.csjoseph.in


Disclaimer: The information given in this document has been made on the basis of the provisions stated in the Limited Liability Partnership Act, 2008. It is based on the analysis and interpretation of applicable laws as on date. The information in this document is for general informational purposes only and is not a legal advice or a legal opinion. You should seek the advice of legal counsel of your choice before acting upon any of the information in this document. We are not responsible for any loss, claim, liability, damage(s) resulting from the use, omission or inability to use the information provided in the document

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