Winding up or Close an LLP

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An LLP can be closed, if it has not commenced business or is not engaged in the activity of business for the last 1 year. The closure application needs to be filed with the mutual consent of all the partners of the firm.

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    How To Close The LLP Company Online?

    For closing your Limited Liability Partnership, you should submit the form 24 with the ROC, along with the declaration, indemnity bonds, and affidavits from all the partners. We, ‘Easebis’ help you close your LLP in 3 simple steps –

    1. Book a slot with our compliance experts

    2. Provide all the required information

    2. Provide all the required information

    Winding up LLP - An Overview

    For closing an LLP, a resolution has to be filed by directors of the company with the Registrar of Companies, within 30 days of its passing. Within 15 days of passing the resolution the statement of assets and liabilities after the closure of accounts, to the date of winding up of the LLP, attested by at least two partners must be submitted. A report of the valuation of company assets must be prepared. Once this has been done, the majority of 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 winding up of the company.

    While registering for a business, you have different options like LLP or Limited Liability Partnership. If you have registered your company as LLP, then you would be required to file mandatory returns whether it is doing business or not. In case you fail to file the returns, then the LLP will be subjected to penalties under the LLP Act, and the partners in the firm will be liable to the same penalties. Hence, filing returns becomes a mandatory act in the case of LLP.

    So, if you are not planning to file the return and Winding up LLP for certain reasons, then it must be closed as per the LLP Act. Easebis is a popular name when it comes to registration or closure of the LLP.

    If you are willing to wind up the LLP, then it must meet the following conditions:

    • The LLP should be inactive for a period of at least 1 year, or it should be inoperative from the date of establishment.
    • The second condition is that the LLP should not have any assets on the date of application.

    Moreover, there is detailed paperwork that needs to be done. The first thing that you need to do is to submit the application along with the required fees and affidavit along with consent from all partners of LLP. In addition, for the closure of LLP, you need to submit the IT return and a Statement of Accounts (of the last 30 days) from the date of application.

    At this point, you must know that the closure of LLP can take up to two months, provided the partners are quick to complete the procedures involved.

    Checklist for Winding LLP

    • The LLP to be closed down should not have commenced business after incorporation.
    • The LLP to be closed down has not been engaged in any business for the past year.
    • The LLP to be closed down has no assets and liabilities.

    Documents Required from Partners & Designated Partners For Closing An LLP

    Partners need to submit the following documents for closure of llp:

    • PAN Card of Partners- Apart from the application form and indemnity which needs to be submitted to the registrar, for the closure of LLP, you are also required to submit PAN cards of all the partners and designated partners of LLP.
    • Aadhaar Card of Partners- Similar to PAN card, another document that needs to be submitted for closure of LLP is the Aadhaar card of all the partners and designated partners of LLP
    • Latest Address Proof of Partners- In addition to the above mentioned two documents, the latest address proof of all the partners of LLP is also needed to be submitted.
    • Consent letter- For the closure of LLP, you would also be required to get the consent letter signed by all the partners and submit it along with form and fees.

    How to Winding up LLP in India

    Step 1:Resolution for Winding up LLP

    A special resolution has to be passed by all or ¾’thof the partners of the company, agreeing to dissolve the partnership.

    Step 2: Form No. 1

    Within 30 days of passing the resolution for closure of llp, form no.1 is filed with the Ministry of Corporate Affairs (MCA) with a copy of the resolution,

    Step 3: No Debt Declaration

    At least two members of the LLP have to declare that it has no debts or liabilities. Or if it does, it will be settled within one year from the commencement of winding up.

    Step 4: Form 4 & Value of Assets

    Form No. 4 along with a report of the value of LLP’s assets has to be submitted to the registrar within 15 days of filing the forms and a statement declaring that the LLP is not being closed to cheat anyone.

    Step 5: Creditor Consent

    The next step is to acquire consent from the creditors of the LLP, to wind up the business. For this purpose, at least ⅔’rd of company creditors have to provide consent.

    Step 6 – Filing Form 6

    Within 14 days of receiving consent from creditors, an advertisement has to be filed in the local newspaper. In case if the LLP has assets or liabilities, a liquidator is appointed and his/her statement needs to be filed using form 6.

    Step 7: Filing Form 9

    Prepare the LLP’s final account statement, and submit them along with form 9 to conclude all formalities.

    Easebis Procedure for Winding Up LLP

    Form 24 LLP

    Form 24 will be filed with the Registrar of Companies along with the declaration from the partners. In addition, you need to submit indemnity bonds and an affidavit stating that the information is true to the knowledge of all the partners.

    Public Notice

    The Registrar of Companies will publish a notice on its website stating the contents of the application, for a period of one month.

    Removal Of LLPs Name

    After one month, the Registrar of Companies will remove the LLP’s name from the register and publish a notice in the Official Gazette, thereby legally closing/dissolving the LLP closure documents format.

    Recent Updates

    MCA has notified new rules for winding up companies

    3-Jun-2020: The Ministry of Corporate Affairs (MCA) has recently notified The Companies (Winding up) Rules, 2020. These new rules have become effective from 1st April 2020. These rules look to make the closing procedure simpler for smaller companies, without the intervention of the tribunal. However, these rules will be applicable only to certain classes of companies which are mentioned under Section 361 of the Companies Act, 2013.

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    Frequently Asked Questions (FAQs)

    Which form must be submitted to appoint a statutory auditor?

    When the statutory auditor is appointed or replaced, Form ADT-1 is submitted.

    The company's director report must be accompanied by which form?

    The director report for the company includes MGT-9, an excerpt from MGT -7.

    Are audited financial statements required for private limited companies' yearly filings?

    Every company must have audited financial statements since it was incorporated. Only the audited statements must be filed by the company.

    What regulations must a private limited company follow?

    Once a company is incorporated, it must continue to comply with all regulations. It takes 30 days to appoint the auditor. The filing of annual returns and income taxes is an additional requirement.

    How should the company file its annual returns?

    The following documents must be submitted to the ROC by companies that were incorporated by the Companies Act of 1956: a balance sheet in Form 23AC and a profit and loss account in form 23ACA, both of which must be submitted by each company.

    What is an annual compliance?

    Annual compliance refers to the set of rules and regulations that a company must comply with on an annual basis. It includes filing of annual reports, conducting annual meetings, maintaining company records, and complying with tax regulations.

    Why is business compliance important?

    Business compliance is important as it ensures that a company operates legally and ethically, and avoids potential legal or financial penalties. Compliance also helps in building the company’s reputation, winning the trust of investors and customers, and attracting new business opportunities. Non-compliance can result in significant legal and financial risks, including fines, lawsuits, and damage to the company’s reputation.

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