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Important Compliance Filing Before Processing LLP Closure in India Introduction Closing an LLP (Limited Liability Partnership) in India may seem like a simple task, especially if the business is no longer active. However, many business owners are unsure whether they can close their LLP without filing annual returns. As per the LLP Act, filing Form 11 and Form 8 is a mandatory compliance requirement, even for inactive LLPs. In this blog, we’ll explain whether an LLP can be closed without filing annual returns, what the law says, and the proper process for closure. This guide will help you understand the legal steps and avoid penalties. What is Annual Return for an LLP? An Annual Return for a Limited Liability Partnership (LLP) is a mandatory compliance document that provides details about the LLP’s partners, business activities, and other basic information as on the end of the financial year. It is filed using Form 11 with the Registrar of Companies (RoC) every year, even if the LLP has not conducted any business during the year. The due date for filing Form 11 is 30th May of each financial year. Filing the annual return helps maintain transparency, keeps the LLP status active, and avoids heavy penalties. It's important to note that this return is different from the financial statement (Form 8) and income tax return. Important Compliance Filing Before LLP Closure? When it comes to closing an LLP, many business owners wonder if they can bypass certain compliance requirements, such as filing annual returns. The short answer is no; you cannot close your LLP without filing the necessary annual returns. Before you apply for the closure of your LLP, the Registrar of Companies (RoC) requires you to file all pending annual returns. This includes two key forms: Form 11 (Annual Return): You must file this form every year, detailing the LLP's partners and any changes in their information. The due date for filing is 30th May each year. Form 8 (Statement of Accounts & Solvency): You must file this form by 30th October, including the LLP’s financial statements for the year, even if there was no business activity. All LLPs, whether active or not, must file annual returns as a legal requirement. If you don’t submit these forms, the Registrar will not process your request to close the LLP. Delays can cause penalties up to 12 times the normal fee, which makes closing the business more difficult. So, file all pending returns before submitting Form 24 to close the LLP. In summary, you must clear all compliance requirements, including filing Form 11 and Form 8, before you can successfully close your LLP. This ensures that your LLP is in good standing with the authorities, avoiding fines and unnecessary delays in the closure process. We offer complete LLP solution with LLP Registration Online, LLP Annual Return Filing, and Strike Off LLP services, ensuring compliance and a smooth process. What is the Closure Process of an LLP? You can close an LLP (Limited Liability Partnership) in India either by voluntarily dissolving it or by having the Registrar of Companies (RoC) strike it off. The process is fairly straightforward but requires careful attention to legal and compliance requirements. Here’s a step-by-step guide to help you understand how to close an LLP: No Outstanding Liabilities: Before proceeding with the closure, ensure that the LLP has no outstanding liabilities, debts, or dues. This includes clearing any pending tax payments, loans, or obligations to creditors. The LLP should not have any assets or liabilities at the time of closure. Consent from All Partners: For the closure of an LLP, consent from all the partners is necessary. This is typically formalized through a resolution passed in a meeting of the partners. The resolution should state the intention to close the LLP and provide the details of the dissolution. File Pending Annual Returns: Before applying for closure, you must file any pending annual returns (Form 11 and Form 8) for the LLP. Form 11 (Annual Return) is due every year by 30th May, and Form 8 (Statement of Accounts & Solvency) is due by 30th October. Filing these forms ensures that the LLP is compliant with the statutory requirements before closure. Prepare Financial Statements and Affidavits: Prepare the financial statements up to the date of closure. Additionally, submit an affidavit stating that the LLP has no outstanding liabilities, along with a declaration from the partners confirming that they are voluntarily closing the LLP and that no dues remain. Filing Form 24 for Striking Off: After completing the above steps, the LLP files Form 24 with the Registrar of Companies (RoC) to strike off its name from the official records. This form includes details such as the reasons for closure and a declaration that the LLP is solvent and free from debts. RoC Verification: After the submission of Form 24, the RoC will verify the application. If the LLP meets all the requirements and is free of any outstanding obligations, the RoC will approve the closure request. In some cases, the RoC may publish a notice in the official gazette to inform the public about the dissolution. Receive the Certificate of Closure: Once the RoC verifies the application and strikes the LLP's name off the register, it issues a Certificate of Closure or Certificate of Striking Off to the partners. This official document confirms that the LLP has been legally closed. Conclusion Closing an LLP requires careful attention to legal and compliance procedures, especially when it comes to filing mandatory annual returns. It is crucial to file Form 11 (Annual Return) and Form 8 (Statement of Accounts & Solvency) before applying for the closure or striking off the LLP's name. Neglecting these filings can lead to penalties and delay the closure process. By ensuring that all compliance requirements are met, including clearing pending returns and liabilities, you can ensure a smooth closure of your LLP. Always follow the correct legal process to avoid unnecessary complications and consult professionals to guide you through the process. Suggested Read : Form 11 of LLP LLP Form 3 Form 8 LLP LLP Form 4 Process to Change LLP Agreement FAQ Yes, even if the LLP hasn’t been operational, it still needs to file the mandatory annual returns (Form 11 and Form 8) before initiating the closure process. Failure to do so will result in penalties and delays in the closure.If an LLP fails to file the annual return (Form 11) or Statement of Accounts (Form 8), it cannot proceed with the closure process. The Registrar of Companies (RoC) will not process the application until all returns are filed, and penalties will accrue for the delay.The penalty for late filing of Form 11 and Form 8 is ₹100 per day for each overdue form. These penalties can accumulate rapidly, further delaying the closure process.Striking off is the process of removing the LLP's name from the Registrar of Companies (RoC) records, while dissolution refers to the formal ending of the LLP's existence. Striking off is generally faster and simpler than dissolution, and is used when the LLP is inactive with no assets or liabilities.The closure of an LLP can take several months, depending on the completion of compliance requirements, the submission of necessary documents, and the Registrar's verification process. On average, it may take 2-3 months to get approval for closure.

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