LLP Form 24 - Easily Close a LLP

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Ministry of Corporate Affairs has recently amended Limited Liability Partnership Rules, 2009 by introducing the Limited Liability Partnership (Amendment) Rules, 2017 with effect from 20th May, 2017. With this amendment, LLP Form 24 has been introduced by the MCA and it is now possible to easily close a LLP by making an application to the Registrar for striking off name of LLP. In this article, we look at LLP Form 24 and the procedure for striking off name of LLP in detail.

Winding Up a LLP

The penalty for LLPs defaulting in filing of any statutory return is Rs.100 per day, without any maximum limit. Hence, its is often best to windup dormant LLPs so that there is no requirement to file LLP Form 11, LLP Form 8 and Income Tax Return for the LLP each financial year to maintain compliance and avoid penalty. Before the introduction of the Limited Liability Partnership (Amendment) Rules, 2017, the procedure for winding up a LLP used to be long and cumbersome. However, with the introduction of LLP Form 24, the procedure has been made easy and simple. Hence, its best for Entrepreneurs having dormant or defaulting LLPs that are accruing penalty to use this opportunity to close the LLP.

Filing LLP Form 24

The following procedure can be followed for closing a LLP by filing Form 24:

Step 1: Cease Commercial Activity

LLP Form 24 can be filed only by LLPs that never commenced business or have ceased commercial activity. Hence, if the LLP is operational and the promoters wish to close the LLP, the LLP must first cease all commercial activity.

Step 2: Close Bank Account(s)

LLP Form 24 can be filed only by those LLP that have no creditors and no open bank account. Hence, prior to filing LLP Form 24, any bank account opened in the name of the LLP must be closed and a letter evidencing closure of the bank account in the name of the LLP must be obtained from the Bank.

Step 3: Prepare Affidavits & Declaration

All the Designated Partners of the LLP must first execute an affidavit, either jointly or severally, that the Limited Liability Partnership ceased to carry on commercial activity from (Date) or has not commenced business. Further, the LLP Partners must also declare that the LLP has no liabilities and indemnify any liability that may arise even after striking off its name from the Register. The liability of the Partners would not be extinguished even after closure of a LLP while using Form LLP 24.

Step 4: Prepare Documents

Along with Form LLP 24 the income tax return of the LLP and LLP deed must be enclosed. In case the LLP has not filed any income tax return and it has not carried on any business activity, then it is not required. Else, a copy of the acknowledgement of the latest Income-tax return filed must be attached with the application for closing the LLP.

Step 5: File Any Pending Documents

After incorporation of a LLP, the LLP agreement must be filed with the MCA within 30 days of registration. In case this compliance was missed and LLP agreement was not filed, then the initial LLP agreement, if entered into and not filed, along with any amendments must be filed. Also, any overdue returns in Form 8 and Form 11 up to the end of the financial year in which the limited liability partnership ceased to carry on its business or commercial operations must be filed before filing LLP Form 24. The date of cessation of commercial operation is the date from which the Limited Liability Partnership ceased to carry on its revenue generating business and the transactions such as receipt of money from debtors or payment of money to creditors, subsequent to such cessation will not form part of revenue generating business.

Step 6: Obtain Chartered Accountant Certificate

Once all the documents for filing of LLP Form 24 is prepared, a statement of accounts disclosing NIL assets and NIL liabilities, that is certified by a

practising Chartered Accountant up to a date not earlier than thirty days of the date of filing of Form 24 must be obtained.

Step 7: File LLP Form 24

The above mentioned documents along with LLP Form 24 (Download LLP Form 24) can be then filed with the MCA to strike off name of LLP. On processing the application, if found acceptable, the concerned Registrar of Companies would cause a notice to be published on the MCA website announcing the striking off of the LLP.

Model LLP Form 24

Click here to contact an IndiaFilings Business Advisor for Closing a LLP.

MCA Notification on Limited Liability Partnership (Amendment) Rules, 2024

On August 5, 2024, The Ministry of Corporate Affairs (MCA) issued a notification introducing significant amendments to the Limited Liability Partnership (LLP) Rules, 2009, focusing on streamlining the LLP strike-off process. The new amendment rules introduce the Centre for Processing Accelerated Corporate Exit (C-PACE) as an additional authority, along with the Registrar, to handle the operations of the LLP name strike-off or Form 24 applications. The applicable changes are made in Chapter XIV. Striking Off Name Of Defunt LLP under LLP amendment rules, 2009. It may be called Limited Liability Partnership (Amendment) Rules, 2024. This LLP amendment rule comes into effect on August 27, 2024. Here is the official MCA notification regarding the Limited Liability Partnership (Amendment) Rules, 2024,

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Frequently Asked Questions

Common questions about LLP Form 24 Filing for Closing LLP.

LLP Form 24 is a form introduced by the Ministry of Corporate Affairs (MCA) that allows for the easy closure or striking off the name of a Limited Liability Partnership (LLP) from the register. It simplifies the process of winding up a dormant or defaulting LLP that is accruing penalties for non-compliance.

LLP Form 24 can be filed for LLPs that have never commenced business operations or have ceased all commercial activities. The LLP must not have any creditors or open bank accounts to be eligible for filing LLP Form 24.

To file LLP Form 24, the designated partners must execute an affidavit declaring the cessation of commercial activity, a statement of accounts certified by a chartered accountant showing nil assets and liabilities, the LLP deed, and the latest income tax return filed by the LLP, if applicable.

The procedure for filing LLP Form 24 involves ceasing commercial activities, closing bank accounts, preparing affidavits and declarations, obtaining a chartered accountant's certificate, filing any pending documents or returns, and finally submitting LLP Form 24 with the required documents to the MCA.

Dormant or defaulting LLPs accrue penalties for non-compliance with statutory filings like LLP Form 11, LLP Form 8, and income tax returns. Closing such LLPs using LLP Form 24 helps avoid these penalties and associated liabilities.

No, filing LLP Form 24 and striking off the name of the LLP from the register does not extinguish the liability of the partners. The partners must indemnify any liabilities that may arise even after the closure of the LLP.

No, LLP Form 24 cannot be filed for an operational LLP. The LLP must cease all commercial activities before filing LLP Form 24.

The date of cessation of commercial operations is the date from which the LLP stopped its revenue-generating business activities. Transactions like receiving money from debtors or paying creditors after this date are not considered part of the revenue-generating business.

The Registrar of Companies processes the application for striking off the name of the LLP filed through LLP Form 24. If found acceptable, the Registrar publishes a notice on the MCA website announcing the striking off of the LLP.

No, LLP Form 24 cannot be filed if the LLP has any open bank accounts. All bank accounts in the name of the LLP must be closed, and a letter evidencing the closure must be obtained from the bank before filing LLP Form 24.