To close down a limited liability partnership (LLP), the resolution to do so must be filed with the Registrar within
30 days of its passing. Once this has been done, the majority of the partners need to make a declaration to the
effect that the LLP has no debts or that it is in a position to pay all debts within a specified period not exceeding
one year from the date of commencement of winding up of LLP. Within 15 days of the passing of the resolutions,
statement of assets and liabilities for the period from the last accounts closure to the date of winding up of LLP
must be submitted, attested by at least two partners. A report of valuation of the assets of the LLP must be prepared.
A LLP winding up can be initiated voluntarily or by a Tribunal. If a LLP is to initiate winding up voluntarily, then
the LLP must pass a resolution to wind up the LLP with approval of at least three-fourths of the total number of
Partners. If the LLP has lenders, secured or unsecured, then the approval of the lenders would also be required for
winding up of the LLP.
A LLP is a legal entity and a juristic person requiring regular maintenance of compliance throughout its lifecycle. LLP winding up can be used close a LLP that is not active and avoid compliance responsibilities. /p>
A LLP that doesn't file its compliance on time incurs fines and penalty, including debarment of the Partners from starting another LLP or Company.
The formalities for winding up of a dormant LLP are relatively simple and easy to complete. Hence, its best to close an inactive LLP at the earliest.
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