Winding Up - LLP

The Limited Liability Partnership (LLP) structure offers outstanding operational flexibility during active commercial trading. However, when the partnership reaches the end of its commercial viability, partners cannot simply walk away and leave the entity unattended.

Under the Limited Liability Partnership Act, 2008, an unclosed LLP remains on the active national register, accumulating annual compliance obligations: filing Form 11 (Annual Return) by May 31, Form 8 (Statement of Account & Solvency) by October 30, and filing partnership income tax returns (ITR-5).

Leaving an inactive LLP unclosed results in compounding statutory late fees under Section 69, suspension of partner DPINs, and potential freezing of personal accounts of Designated Partners.

To provide a clean, dignified, and cost-effective exit for inactive partnerships, the Ministry of Corporate Affairs provides the Fast-Track Exit (FTE) mechanism under Rule 37 of the Limited Liability Partnership Rules, 2009.

By filing LLP Form 24 on the MCA V3 portal, partners can permanently dissolve their partnership, cancel their LLP Agreement, extinguish liabilities, and obtain an official Certificate of Dissolution with a minimal government fee of just ₹1,000.

Under Rule 37(1)(b) of the LLP Rules, 2009, an LLP can apply to the Registrar to strike off its name from the register if:

1. The LLP has not commenced business within one year of its incorporation; OR

2. The LLP has ceased to carry on commercial business or operation for a period of not less than ONE YEAR.

Prerequisites Before Submitting Form 24:

• No Creditor Liabilities: All trade payables, supplier invoices, bank loans, and statutory dues must be fully cleared.

• Closed Bank Current Account: The LLP's current account must be permanently closed, and a Bank Account Closure Certificate obtained.

• Updated LLP Agreement: The Initial LLP Agreement (and any subsequent amendments) must have been filed with the ROC via Form 3.

• Surrender of Tax Codes: Surrender of GST registration and cancellation of any state tax registrations.

Filing Form 24 requires a validated documentary package prepared by VyapTax:

The administrative procedure for LLP strike-off moves through a streamlined statutory pipeline:

• Filing Form 24 on MCA V3: The application is submitted with the nominal statutory fee of ₹1,000, attaching the CA statement of accounts, partner affidavits, and indemnity bonds.

• Registrar Scrutiny: The Registrar of Companies reviews the documents, verifying that the LLP agreement was filed and that zero creditor charges remain active on the portal.

• Public Notice on MCA Website: The Registrar publishes a formal notice on the Ministry of Corporate Affairs website for a period of ONE MONTH, inviting the public or creditors to submit objections.

• Official Gazette Dissolution: If zero objections are received within the 30-day notice period, the Registrar strikes off the name of the LLP from the register and publishes a notice of dissolution in the Official Gazette, legally terminating the partnership.

VyapTax manages your complete partnership winding up in 5 rapid stages:

Here are answers to the practical questions partners ask our corporate secretarial practice: