Closure of LLP (Fast Track Exit)
Winding up is the process, where all the assets of the business are sold to paying off creditors and distributing surplus if any, among the owners of the business. An LLP may decide to wind up its business by two modes, either by voluntarily winding up or compulsory winding up.
In voluntary winding up partners may decide between themselves to wind up the operations of the business.
In compulsory winding up an LLP may be compulsorily wound up by the order of the tribunal. There are certain circumstances for the LLP compulsory winding up. Eg. when LLP is unable to pay off its debts, where the number of partners of the limited liability partnership is reduced below two and it continues for the period of more than six months.
FAQ on Closure of LLP:
What are the compliances for Winding up of OPC?
Form FTE Application for striking off the name of company under the Fast Track Exit(FTE) Mode
Why ROC filing is required for Closure of LLP?
- It is necessary to file Closure with the ROC as ROC or MCA data base need to be updated and the LLP is free from all its legal compliances as it is officially closed. Even though business of the company is closed, unless closure documents are filed and approved by the ROC, company is not legally closed and the LLP needs to file all the regular returns.
What is eligibility to close LLP?
- Any LLP which has been inoperative for more than 1 year or incorporated for more than One year and have no business can apply for Closure under FTE scheme. Form 11 & Form 8 filing need to be up to date, otherwise the closure of LLP may be rejected by ROC.
What are the documents required for winding up of LLP?
- Application for Striking off of the LLP
- Partners Meeting Resolution for closure
- Consent of Partners
- Partners’ Affidavit
- Indemnity Bond
- Statement of Assets and Liabilities.
What is the time limit to file closure documents with ROC?
- The Form has to filled be filed with ROC office within 30 days from the date of Signing of the Statement of Assets and Liabilities.
What are the reasons for winding up by Tribunal?
- LLP wants to be wind up
- There are less than two partners in LLP for a period of more than 6 months
- LLP is not in position to pay its debts
- LLP has not filed with the registrar, the statement of Accounts and solvency or annual returns of LLP for any 5 consecutive financial years.
- The Tribunal is of the option that it is just and equitable that the LLP should be wound up.