Inoperative LLP Closure

When the LLP has incorporated a Certificate of Incorporation is issued by the Registrar of Companies.

When the LLP has incorporated a Certificate of Incorporation is issued by the Registrar of Companies which acknowledges the existence of the LLP. Once the name of the LLP is entered into registrar it cannot be removed unless the LLP applies for it or processed by law. When the LLP fails to commence its business or fails to submit yearly returns, the registrar by its own may put the name of the LLP into strike off.

As per the MCA an LLP which is not carrying any business for a period one year or more can be able to file the application to the ROC with the consent of all the partners for striking off. The striking off LLP did not need to file the overdue returns in Form 8 and Form 11 but subject to some conditions.

In case the LLP wants to close down its business or where it is not carrying on any business operations for the period of one year or more, it can make an application to the Registrar for declaring the LLP as defunct and removing the name of the LLP from its register of LLP’s

The LLP shall have to file overdue returns in Form 8 and Form 11 up to the end of the financial year in which the LLP ceased to carry on its business or commercial operations before filing.

In case the LLP has not filed the initial LLP Agreement with the Registrar, a copy of the initial LLP agreement, along with changes thereof must be furnished to the Registrar in cases where the LLP has not commenced business or commercial operations since its incorporation.

For this purpose, ‘the date of cessation of commercial operation’ is the date from which the LLP ceased to carry on its revenue-generating business. The transactions such as receipt of money from debtors or payment of money to creditors, after such cessation, will not form part of revenue-generating business.


Procedures for Closing Dormant LLP

  • Preparation of Statement of Accounts: The Closing process of LLP starts with preparation of statement of account which reflect nil assets and liabilities.
  • Closure Documents:The Next step of the closing LLP is preparing the closure documents such and
    consent to close LLP, indemnity bond and affidavit. These documents will be accompanied with an application for closing.
  • Final forms Filing with MCA:After completion of all the documents required for closing LLP, alone with application documents are filed with respective registrar of companies for approval.
  • Monitoring of Filed forms: Since, closure of LLP is least priority item in MCA, usually it will take 6 months to complete process. In between, we may get clarification query from registrar asking for further
    documents/clarification.
  • Final Closing: If all documents are in order and no further clarification from MCA, matter will put for advertisement in MCA website for any public comments. After completion of the period for advertisement, ROC will close LLP and in the master data, the status of LLP will be changed to strike off

FAQ

Minimum one year has elapsed after incorporation of the LLP for making application for striking off the name of the LLP.
In case business is started and stopped in between, LLP shall file all Income tax returns till the date of operation. LLPs not started operation can file closure application without filing returns.
If LLP started operation and stopped in between, all returns shall be filed till the date of operation of the LLP. Otherwise, LLP can opt for closure without filing returns.
No, once closure application is filed no need to file any returns
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