What is LLP Winding Up?
LLP Winding Up is the legal process of formally closing a Limited Liability Partnership by settling all outstanding liabilities, distributing remaining assets among partners, and removing the entity from the MCA register. It is governed by the LLP Act, 2008 and LLP Rules, 2009.
Methods of LLP Dissolution
| Method | When Applicable | Timeline | Key Form |
|---|
| Strike Off (Form 24) | Inactive LLP with nil assets/liabilities, inactive ≥ 1 year | 3–6 months | Form 24 |
| Voluntary Winding Up | Partners mutually decide to dissolve; may have assets/liabilities | 6–12 months | Resolutions + Liquidator |
| Compulsory Winding Up | NCLT orders dissolution — insolvency, fraud, or 5 years non-filing | 6–24 months | NCLT Petition |
Eligibility for LLP Strike Off (Form 24 — Simplest Method)
Under Rule 37 of LLP Rules, 2009, an LLP qualifies for strike off if:
- Ceased business operations for at least 1 year before application
- Has nil assets and nil liabilities
- No pending legal proceedings
- All pending annual filings (Form 8 and Form 11) completed
- All Income Tax Returns filed
- Bank accounts closed
- GST registration cancelled
- All partners declare solvency — no outstanding debts
Consequences of Not Closing a Defunct LLP
| Consequence | Penalty/Impact |
|---|
| Late Filing Fee (Form 8) | ₹100 per day — no upper cap |
| Late Filing Fee (Form 11) | ₹100 per day — no upper cap |
| Annual Return Non-Filing | Up to ₹5,00,000 on LLP and partners |
| Partner Disqualification | Bars from future LLP/company directorships |
| Compulsory Strike Off by ROC | ROC removes LLP without partner consent |
