Close Inactive or Defunct LLP

Winding Up of LLP is Easy & Online

The LLP being is a creation of law; it can be closed by the procedures established by law only. An inactive or defunct LLP can be wound up fast with a simplified process by filing Form 24 to ROC with CA Certificate, affidavits and indemnity bonds.

  • 100% Online Process
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  • Hassle Free Process
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Pricing for Striking Off an Inactive LLP (Form 24)

Basic

₹11,999/-

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Silver

₹14,999/-

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Gold

₹25,999/-

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Note: None of our packs includes Notary Service or the Cost of Stamp Paper.

(We will draft the documents, and you have to buy stamp paper from a local stamp vendor and get the affidavits and indemnity bond notarised)

Various Methods to Close an LLP

The reasons for deciding to close an LLP may be many such as Inactivity or Non-Operation, Closure of Business of LLP, Passing away of key people of the LLP, a dispute among the partners, LLP Being Defunct, etc. The first and foremost is to understand the different ways in which an LLP comes to an end and. Here are three situation

  1. Striking off the LLP by declaring it as Defunct: When an LLP is inactive for over one year, and there is no business operation, the easiest method is to make an application for striking off the name of LLP under Rule 37 by filing Form 24.
  2. Voluntary Winding Up of LLP: The LLP makes an application for its winding up to the NCLT, with the consent of 3/4 majority of partners, it may apply to wind up the LLP voluntarily. The voluntary winding up is conducted by the Liquidator, who sells the assets of the LLP and pays the creditors from the proceeds. Based on the liquidator report, the NCLT passes the order to Windup the LLP on its satisfaction in the given facts and circumstances.
  3. Compulsory Winding Up of LLP of By NCLT: On an application by the creditors to whom the LLP is unable to pay its debt, or on an application by any partner, the ROC or the Government of India, the NCLT may start the compulsory winding-up process. An LLP Liquidator is appointed to dispose of the assets and pay the debts of the LLP, and if satisfied, the NCLT makes an order for compulsory winding up of the LLP.
Various Methods to Close an LLP
Difference between Winding UP and Striking Off

Winding Off: In an NCLT winding off, the LLP comes to an end and can not be revived in due course of time; the liquidator sells all the assets of the LLP and settles off the liabilities from the proceeds of the liquidation process. The winding-up is final and brings a definite end to the LLP, and no one remains liable for the outstanding liabilities that could not be paid during the liquidation process.

Striking Off: Whereas a striking off the LLP is a process based on the declaration of the partners of the LLP, and no official liquidator is involved. Based on the affidavits of truthfulness and an indemnity bond from the partners that they shall be personally liable for any future liability of the LLP, the ROC strike off the name of the LLP. The effect of the striking-off of the LLP is that there is no compliance requirement, and for all practical purposes, the LLP has been closed. However, in case there are any government dues, tax dues or any liability that comes up after the striking-off, the LLP, the partners of the LLP remain personally responsible. Before filing for striking off, we advise you to settle all disputes, accounts and pay all dues.

Striking off Defunct or Inactive LLP Under The Rule 37 of the LLP Rules 2019

For the defunct LLP, which has had no business activities for more than one year, rule 37 of the LLP Act lays down an easy method to close the LLP by filing a simplified application to the ROC in Form 24. The closing of an LLP via Form 24 is known as the Striking Off the Name of the LLP From the register of LLP maintained by the ROC. For striking off the name of the LLP, the designated partners must settle the books of account of the LLP, sell all the assets of the LLP pays the debts and liabilities. The conditions for applicability of Rule 37 for striking off LLP is as under.

Inactivity The LLP must be defunct or inactive for at least one year before the date of filing form 24 for striking off the name of LLP. Inactivity means that the LLP has not carried any commercial transaction in the past year; mere payment of dues or receipt of money does not amount to commercial activity.
Assets or Liability The LLP does not own any asset, and there must not be any liability. The financial statement must show Nil Assets and NIL Liabilities.
Partners Consent All partners of the LLP must consent to strike off the LLP; in case of dispute between partners, Form 24 is not applicable.
CA Certification A Chartered Accountant must attest to the Statement of Accounts showing NIL assets and liabilities in practice. The date of the statement should be within 30 days on which Form 24 is being filed.
Annual Return The LLP must have filed its annual return in Form 11 and Form 8 for its active period. Refer to sub-rule 1A of Rule 37 of the LLP Rules
Check DIN Status Every year DIR-3(KYC) must be filed to keep the DIN active for the LLP partners; check the DIN status; if the KYC has not been filed, Please do file the DIN KYC.
Check DSC Validity As the application for striking off the LLP is filed with the use of Digital Signature, check if the DSC is valid for the partners; if not, Go for DSC Renewal.
Stepwise Process of Making an application to Strike Off the LLP

Step - 1:
Partners Meeting

Documentation

Convene a meeting of all the partners and obtain consent from all the partners for making an application to strike off the LLP.

Step - 2:
Sale of Assets and Payment of Dues

Generation of User ID and Password

If the LLP has any assets, first sell them and pay all the liabilities so that therein NIL asset and NIL Liability in the LLP

Step - 3:
Close Bank Account

Application Filing

The bank account of the LLP need to close and obtain a closure certificate from the banker along with the final statement.

Step - 4:
Statement of Account

Inspection of the premises

Prepare a statement of account and get it certified by a Chartered Accountant in practice. The statement should not be older than 30 days on the date of filing form 24

Step - 5:
Affidavits and Indemnity Bond

Scrutinization of Application

All the partner has to swear in an affidavit about the truthfulness of the particulars of documents and information being filed in Form 24. The partners are also required to sign an Indemnity Bond taking personal responsibility for any future liability that may arise for the LLP.

Step - 6:
Filing of Form 24

Issue of License

Finally, the prescribed form 24 for striking off the LLP is filed with the ROC along with the scan copy of supporting documents, the Form 24 is filed with the DSC of partners and need Certification from CA, CS or CMA.

List of Documents for Filing Application to Strike Off the LLP
S.No Document
1. Consent of all the partners
2. Bank Closure Statement
3. CA Certified Statement of Accounts
4. Copy of ITR Acknowledgement of LLP
5. LLP Agreement
6. Affidavits of all partners
7. Indemnity Bond of all partners
8. Identity and Current Address Proof of partners
Stamp Duty & Notary

All the partners of the LLP have to file an affidavit and indemnity bond prepared on the appropriate value of the Non-Judicial Stamp paper. The affidavits and the indemnity bonds are required to be witnessed/attested by a Notary Public.
The stamp duty may differ from state to state; hence you should check the appropriate stamp paper value from the local vendors; generally, Rs 100 stamp paper is applicable for indemnity bond and Rs. 50-100 is applicable on affidavits.
The Notary attestation is an activity where the deponent of the affidavit of the person making the indemnity bond signs in the presence of the Notary. Hence, you should take the affidavits and indemnity bond after purchasing the stamp paper to the local Notary's office for attestation.

Benefits of Closing Inactive or Dormant LLP
Retail Sale Drug Licence

Free From Compliance Burden: Certain legal compliance needs to be done even if the LLP does not do any business or is inactive. There is no relaxation from filing TDS or GST returns even if there is no transaction; similarly, annual compliance like filing of ITR, Form 11 and Form 8 with the ROC is a must. Any failure on these aspects results in a heavy penalty. By closing an LLP that does not intend to do business, it is relieved of compliance burden.

Wholesale Drug Licence

Save Money on Compliance: As already discussed, even if the LLP does not do any business, it must file various returns under the law. There is a substantial cost regarding the professional fee for doing several compliances. If a due date for the compliance is missed, then it leads to an additional fee payable at Rs. 100 for each day of delay. Therefore, In these circumstances closing an inactive LLP is always a wise decision that will ultimately result in saving money in the long term.

Manufacturing Licence for Drug

Move on in Life: The decision to make an LLP always starts with the hope of making it big, but everything planned may not meet the same fate. Business decisions can go wrong. Hence, if the plans are not going well or the team that started the journey together does not seem in sync, it is always better to conclude the LLP and move on in life.

Frequently Asked Questions

Is Newspaper Advertisement Necessary While Closing the LLP?

The newspaper publication is mandatory in case of voluntary or compulsory winding off before NCLT. The provisions are silent regarding the striking off; we recommend publishing Newspaper Notice as to an abundant caution even in case of the striking off application.

Which date should one reckon for cessation of LLP business?

The relevant date from which the LLP shall be considered inactive is when the LLP ceased to carry on its revenue-generating activity; mere receipt or payment of money from earlier transactions after cessation of commercial activity shall not affect the date on which LLP has become inactive or dormant.

Whether up to date annual filing is required before the closure of LLP?

The annual returns of the LLP in forms 11 and 8 need to be filed for the financial year in which LLP was active. For example, if the LLP was active until 25th October 2020, then the FY 2020-21 annual return must be filed before the LLP Striking Off application is filed.

What if the Initial LLP Agreement of the LLP is not filled?

The law is that the LLP must file the LLP agreement in Form 3 within 30 days of its incorporation. However, if the LLP fails in filing Form 3, the copy of the LLP Agreement must form part of the documents attached to Form 24.

Is it necessary to file ITR of LLP?

f the LLP has commenced the business operations and subsequently becomes defunct, the ITR must be filed up to the Financial Year when the LLP was active. However, if the LLP could not start the business operations, the LLP may file For 24 without filing the ITR.

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Manjunath S Manjunath S , 19 Nov, 2019
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Good company for dealing with startups especially for documentation and registration. On the time action and positive results. ........See at Google

ANIL YADAV ANIL YADAV , 19 Sep, 2019
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Great people, culture, All of the team, including the managers are approachable, helpful, caring and hard working.....keep up the good work....!! ...See at Google

Mdz Mdz , 19 Nov, 2019
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I would like to mention that Set India Biz is one of the best professional company I have worked with. All team members are customer focused...See at Google

Pravesh Verma Pravesh Verma , 19 Nov, 2019
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Rhanks To Sana For Being An Best Supportive Cordinator All The Time. On Start Had face a Lot of Issues because of mumbai Office but then Got in...See at Google

Divya Kholakiya Divya Kholakiya , 19 Nov, 2019
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Excellent service. Mainly, its the timely update needed which is supplied on regular intervals. Ms. Khushboo & Ms. Swati were very cooperative...See at Google

Radhakrishnan Velayudhan Radhakrishnan Velayudhan , 19 Nov, 2019
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The support given to me by corporate lawyer Mr. Kishore is really commendable. He was very cooperative in her approach towards our requirement and...See at Google

Mukund Tripathi Mukund Tripathi , 30 Sep, 2019
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I had a good experience with SetIndiaBiz for TM registration. Mr. Shubham who was dealing my case was very professional and clear about what is ...See at Google

Sri Nithya Saswathananda Sri Nithya Saswathananda , 20 Sep, 2019
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REALLY FAST AND PROMPT SERVICE.VERY GOOD EXPERIENCE OF SETTING UP ALL THE REQUIREMENTS WITHOUT ANY HINDERANCE. .THANKS TO THE TEAM ESPECIALLY MR. ...See at Google

SANDEEP KUMAR SANDEEP KUMAR , 20 Sep, 2019
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I hardly trust people in business society. However, the people in this company are exception. You can trust them blindly. They are unbelievably ...See at Google

Amit Kumarw Amit Kumar , 20 Sep, 2019
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