Winding up of an LLP

The LLPs are newly formed business entities introduced through the LLP Act, 2008 in India. The Limited Liabilities enjoy the audit exemption if the annual turnover is less than Rs. 40 lakh or capital contribution is less than Rs. 25 lakhs.

The Limited Liability Partnership is a basic partnership in which all partners share limited liabilities under certain legal terms and documentation. This process helps an individual register their LLP, but many are unsure about the winding-up process. This guide explains how to wind up an LLP in India.

Winding up of an LLP by the tribunal

• The LLP wants to wind up.
• There are less than two partners in the LLP for more than 6 months.
• The LLP is not in a position to pay debts.
• The LLP has acted against the interest of sovereignty and integrity of India.
• The LLP has not filed annual returns for five consecutive financial years.
• The Tribunal deems it just and equitable for winding up.

Voluntary winding-up of an LLP

The process can be initiated with the approval of 3/4th of the partners. A declaration is made that the LLP has no debts or will repay within 1 year. A statement of declaration, assets, and liabilities must be submitted.

Asset valuation is required. Voluntary winding up is effective from the date of passing the resolution.