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Winding Up - LLP

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Winding Up of LLP in India

Winding up of an LLP refers to the process of closing down the partnership and dissolving its existence. This process is governed by the Limited Liability Partnership Act, 2008 and involves settling the firm’s liabilities and distributing any remaining assets among its members. The winding-up process can either be voluntary or compulsory depending on the circumstances.

Who Needs to File for Winding Up?

  • LLPs that are no longer operating or are unable to pay off their liabilities.
  • Members of the LLP who wish to voluntarily close the business.
  • Regulatory authorities or creditors who initiate winding-up due to non-compliance or insolvency issues.

Benefits of Winding Up

  • Closure of Liabilities: Settles any outstanding debts and obligations of the LLP.
  • Legal Compliance: Ensures compliance with the regulations set by the Ministry of Corporate Affairs (MCA) regarding dissolution.
  • Relieves Members: Protects the LLP members from future liabilities or legal actions related to the business.
  • Financial Settlement: Distributes the remaining assets, if any, among the partners based on the agreement.

Consequences of Non-Compliance

Failure to wind up an LLP as per the legal guidelines may result in penalties, continued liability for the members, or legal action. Non-compliance with statutory requirements may also lead to suspension of operations or legal complications regarding assets and debts.

Documents Required for Winding Up

  • Resolution passed by the partners of the LLP to wind up the business.
  • Statement of assets and liabilities as of the winding-up date.
  • Details of the outstanding creditors and payments made to them.
  • Proof of tax filings and other compliances up to the date of winding up.
  • Notice of dissolution submitted to the Registrar of Companies (RoC).

Step-by-Step Process for Winding Up

  • Partners' Resolution: The partners pass a resolution agreeing to wind up the LLP voluntarily or after the occurrence of an event that mandates dissolution.
  • Appointment of Liquidator: The partners appoint a liquidator to manage the winding-up process and handle distribution of assets and liabilities.
  • Clearance of Liabilities: The LLP’s debts and liabilities are settled, and creditors are paid off as per priority.
  • Asset Distribution: Remaining assets of the LLP are distributed among the partners as per the LLP agreement.
  • Filing with MCA: File necessary documents with the Ministry of Corporate Affairs (MCA) to officially close the LLP and deregister it.

Filing Lounge's Process for Winding Up

  • Initial Consultation: We assess your business situation and guide you on the appropriate winding-up process.
  • Document Preparation: We assist in preparing and verifying the required legal documents, resolutions, and filings.
  • Liaising with Authorities: We coordinate with the Registrar of Companies (RoC), liquidators, and other relevant stakeholders to ensure smooth execution.
  • Post-Winding-Up Support: We provide assistance in final filings and ensure all statutory requirements are met even after the LLP is closed.

How Filing Lounge Can Help

Filing Lounge provides expert services for hassle-free winding-up of LLPs. Our team ensures that all legal and regulatory requirements are met, ensuring a smooth and efficient closure process.

  • Expert Guidance: Get step-by-step support and advice throughout the winding-up process.
  • Comprehensive Assistance: We handle all the paperwork, coordination with authorities, and filing, ensuring full compliance.
  • Quick Processing: We aim for timely processing to help you close your LLP with minimal delays.
  • Compliance Assurance: We ensure that your winding-up process is in strict accordance with the legal guidelines of the MCA.

For more information, visit our Winding Up of LLP page.

With Filing Lounge, winding up your LLP is a smooth, efficient, and legally compliant process.

Related Guides

Documents Required For Winding UP - LLP

Proprietorship vs Limited Liability Partnership (LLP) vs Company

Features Proprietorship Partnership LLP Company
Definition A sole proprietorship is an unregistered business entity managed by a single individual. A legal contract between multiple parties to jointly manage and run a business operation. A business type that combines aspects of a partnership and the limited liability of a corporation. A registered business where owners and shareholders have limited liability.
Ownership
  • Single individual
  • Min 2 Partners
  • Max 50 Partners
  • Designated Partners: Min 2(No upper limit)
  • Min: 1 shareholder (for a private company), 7 shareholders (for a public company)
  • Max: 200 shareholders (for a private company), no upper limit (for a public company)
For One Person Company
  • Minimum: 1 individual
  • Maximum: 1 individual
Registration Time 7-10 working days
Promoter Liability Unlimited Liability Limited Liability
Documentation
  • Partnership Deed
  • PAN card of the partnership firm
  • LLP Agreement
  • Incorporation Certificate
  • PAN card of the LLP
  • MOA
  • AOA
  • Certificate of incorporation
  • PAN card of the company
Governance No specific governing law Governed by the terms outlined in the partnership deed Governed by the LLP agreement Governed by a formal structure including a Board of Directors
Transferability Business cannot be transferred Ownership transfer requires the consent of all partners as outlined in the partnership deed. Transferable Easily Transferable for public companies. In private companies, there might be some restrictions.
Compliance Requirements
  • Income tax filing if the turnover exceeds Rs. 2.5 lakhs.
  • Must file ITR 5
  • Must file ITR 5
  • File Form 11
  • Form 8
  • MCA filing
  • Auditor's appointment
  • File ITR 6

Winding Up of LLP FAQ's

What is Winding Up of an LLP?

Winding up of an LLP refers to the process of closing the business and dissolving the LLP, including settling liabilities, selling assets, and distributing remaining funds among partners.

Why is Winding Up necessary?

Winding up is necessary when an LLP ceases to function, becomes insolvent, or the partners decide to dissolve the business. It ensures that all liabilities are settled and the legal process is completed in compliance with the regulations.

What documents are required for Winding Up of an LLP?

The required documents include the resolution for winding up, statement of assets and liabilities, tax clearance certificate, creditors’ list, and notice of dissolution submitted to the Registrar of Companies (RoC).

Can Winding Up be done online?

Yes, the winding-up process can be initiated online through the Ministry of Corporate Affairs (MCA) portal, where the necessary forms and documents can be submitted for approval.

What is the resolution for Winding Up?

The resolution for winding up is a formal decision passed by the partners of the LLP agreeing to dissolve the business either voluntarily or due to other legal reasons.

What happens after submitting the Winding Up resolution?

After the resolution is passed, a liquidator is appointed to manage the winding-up process, settle liabilities, and distribute assets. The dissolution notice is filed with the Registrar of Companies (RoC).

Can I wind up only part of the LLP’s business?

No, the winding-up process applies to the entire LLP. Once the process is initiated, it involves closing down the entire business and settling all debts and liabilities.

What is the process for Winding Up an LLP?

The process involves passing a resolution to wind up the LLP, appointing a liquidator, settling liabilities, distributing remaining assets, and filing a notice of dissolution with the Registrar of Companies (RoC) for official closure.

What happens if I do not wind up my LLP?

If you do not wind up the LLP, you may continue to be liable for any outstanding debts or obligations. The LLP may also face legal penalties for non-compliance with the statutory requirements for dissolution.

How long does the Winding Up process take?

The winding-up process typically takes 3-6 months, depending on the complexity of the LLP’s liabilities, asset liquidation, and the processing time with the Ministry of Corporate Affairs (MCA).

How can Filing Lounge help with Winding Up of an LLP?

Filing Lounge provides comprehensive support for winding up an LLP, including document preparation, coordination with regulatory authorities, appointment of liquidators, and ensuring smooth and legally compliant closure of the LLP.

Related Business Registrations

In addition to registration or incorporation, a business may require other registrations depending on the business activity undertaken. Talk to an Advisor to find out registrations your business may require post registration.

FSSAI Registration
IE Code
Trademark Registration
Copyright Registration
Salaried Tax-filing
GST Return Filing

MCA Compliance

Each registered entity is required to meet its compliance duties at the close of each financial year. This generally includes auditing financial statements, filing income tax returns, and submitting annual forms to the Ministry of Corporate Affairs (MCA).

Compliance For Form Due date Penalty
Commencement of Business Intimation to Registrar for Commencement of Business Within 180 days from incorporation INR 50,000 on company and INR 1,000 per day on directors for each day of default
Annual KYC of Directors DIR 3 E-KYC 30th September of every year INR 5,000 for late filing
Appointment of Auditor Form ADT 1 Within 15 days of the AGM INR 300 per day (max INR 12,000)
Financial Statements Form AOC 4 Within 30 days from the AGM INR 100 per day of default
Annual Return Form MGT 7 Within 60 days from the AGM INR 100 per day of default

All Limited Liability Partnerships (LLP) in India must file annual returns with the Ministry of Corporate Affairs (MCA). FilingLounge provides affordable services to help you keep your LLP compliant.

LLP Compliance Form Due date Penalty
Annual KYC of Directors DIR 3 KYC 30th September of every year INR 5,000 for late filing
Annual Return Form 11 May 30th every year INR 100 per day of default
Statements of Accounts and Solvency Form 8 30th October every year INR 100 per day of default (minimum penalty INR 10,000)

In addition to the filings listed above, there may be other compliance requirements relevant to LLPs. To ensure all compliance needs of your LLP are met, please seek assistance from a Filinglounge Advisor.

Entity Compliance Form Due date
Private Limited Company Annual Return MGT-7 Within 60 days from the conclusion of the AGM
Financial Statements AOC-4 Within 30 days from the conclusion of the AGM
DIR-3 KYC DIR-3 KYC 30th September every year
Return of Deposits DPT-3 30th June every year
Appointment of Auditor ADT-1 Within 15 days from the conclusion of the AGM
Income Tax Return (Non-audit case) ITR-6 31st July every year
Income Tax Return (Audit case) ITR-6 30th September every year
Annual GST Return GSTR-9 31st December of the subsequent financial year
MSME Form Form 1 (MCA) half-yearly return by 31st October (April to September), & 30th April for the period October to March every year
Limited Liability Partnership Income Tax Return (Non-audit case) ITR 5 31st July every year
Income Tax Return (Audit case) ITR 5 30th September every year
Annual Return Form 11 30th May every year
Financial Statements Form-8 30th October every year

Note : There might be extra filings needed depending on your business type and activities. Talk to a FilingLounge advisor to get the right guidance for your company's compliance.