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Close Inactive or Defunct LLP
Now Close Your LLP online with the assistance of LAW SUVIDHA and get quality services at affordable prices.
The Limited Liability Partnership, or LLP, is a new type of business structure formed in India by the LLP Act of 2008. The procedure of winding up a firm involves the sale of business assets and the payment of creditors. If there is any surplus profit or asset, it is allocated to the LLP partners in line with the Limited Liability Partnership Agreement.
To wind up an LLP, a resolution for winding up an LLP must be passed and filed with the Registrar within 30 days of the resolution being approved. We shall regard the voluntarily winding up of the LLP to begin on the date of passing the resolution of the winding up of the LLP. LLP’s can be dissolved quickly and easily with the assistance of Law Suvidha.
Even if the LLP is dormant or inactive, some legal requirements must be met. Even if there is no transaction, there is no exemption from completing TDS or GST returns; similarly, yearly compliance such as filing ITR, Form 11 and Form 8 with the ROC is required. Any failure in these areas carries a severe cost. It eased compliance load by shutting an LLP that does not plan to perform business.
Even if the LLP does not conduct any business, it is required by law to file numerous returns. There is a significant expense associated with the professional charge for doing several compliances. If a compliance due date is missed, an extra cost of Rs. 100 is levied for each day of delay. As a result, in these situations, shutting an inactive LLP is always a prudent move that will cause long-term savings.
The desire to succeed always motivates the choice to form an LLP, but not everything that is planned will succeed. Business choices can be made erroneously. Consequently, if things aren’t going as planned, or if the team that started the trip isn’t on the same page, it’s always better to terminate the LLP and move on.
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Yes, the LLP can be wound up if it has been dormant for at least one year from the date of incorporation until the application is filed.
For voluntarily winding up, an LLP must approve a resolution with the consent of at least 3/4 of the total number of partners.
There are two different forms of winding up. These include:
» Voluntary winding up.
» Mandatory winding up.
LLP dissolution usually takes 14-20 days.
Prior to closing down, the relevant Limited Liability Partnership authorities must accomplish the following tasks:
