The Limited Liability Partnership Act, 2008 introduced the Limited Liability Partnership in India. This is totally different from the other company formation norms. The good thing about the LLP is in the partnership process one partner will not be accountable for the fault of the other partner. For a business, the associated partners have the right to control the business. There are two different ways of closing a LLP Business, one is Voluntary closing of LLP and the other is Compulsory Closing of LLP.
Voluntary closing of LLP:
For closing the LLP voluntarily, it should have the consent and approval of at least three fourths of the total members in the company. If the LLP also have lenders, they should also get the approval of the lenders.
Compulsory closing of LLP:
- If in case the company wants to wind up or is unable to pay the debts
- If the partners numbers in less than two for a period of more than 6 months
- LLP has acted in a fraudulent manner or against the integrity and sovereignty of India
- If financial records for previous five consecutive years isn’t submitted
- The tribunal is of the opinion that the LLP is equitable and that LLP should be shut.
- The LLP passes needs to pass a resolution with the approval of three fourth partners of the company.
- The resolution should be filed with the Registrar within thirty days of passing the resolution
- The partners should declare that the LLP has no debt or that it will be able to pay its debts in full within one year from the commencement of the closing in an affidavit and it should be submitted to the registrar within 15 days
- Lenders consent must also be filed
- Within 14 days of the receipt of creditors’ consent, give notice of the resolution by advertisement in a newspaper circulating in the district where the registered office or the principal office of the LLP is situated.
- This liquidator is to file a declaration.
- Final accounts of the LLP are to be submitted
QusWhat are the criteria of Audit for the Partnership Firm Registration?
AnsThe company should file a year ago before closing.
QusWhat is the key requirement for the closing of the company?
AnsThe partner should be an Indian Citizen. The NRIs can only invest on the business.