Closing the company has become comparatively easier now.Fast track exit mode has come to the rescue if one wishes to close the company and strike of its name from the register of companies.
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Closure of Private Limited Company
Private Limited Company is not running properly or faces continuous losses, it is better to close such private limited company and look for a new beginning. A private limited company needs to be closed or windup when there are no exchanges or the Directors of company are not willing to proceed its operations. A private limited company generally can be shut by both voluntary and compulsory circumstances.
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procedure to close an LLP company in India, involves the following processes or steps:
The LLP must pass a resolution in favor of its winding up with approval of at least 3/4th of its total number of partners. This resolution should also be supported by at least 2/3rd of its creditors in value.
Within 15 days of passing such a resolution a declaration in an affidavit duly signed by the majority of the designated partners of the LLP, should be submitted to the Registrar. This declaration must clarify that the LLP has no debts, or if there are some debts, the LLP is able to pay off those in full through sale of its assets, in a maximum of one year period, counted from the date of the commencement of winding up. A copy of the resolution for winding up is to be submitted to the Registrar within 30 Days of passing the same.
Within Two Weeks of the receipt of the consent of sufficient creditors in favor of the resolution of winding up, the LLP is required to advertise its notice of resolution in a newspaper which is widely read in the region where the registered office of the LLP is located.
Within 30 days of receiving creditors’ consent, the designated partners are then required to appoint a Liquidator to carry out the necessary processes of winding up, along with maintaining proper books of accounts. Then, the Liquidator is required to submit the report together with the resolution to the Registrar, and file an application for winding up to the Tribunal. Submission of other documents mentioned above, is also to be made.
In case the Tribunal gets satisfied with the processing of winding up and necessary accounts, then it will pass the permission for dissolution of the LLP. Then, the liquidator needs to file the order of Tribunal with the Registrar along with an application requesting winding up. Finally, the Registrar will publish a notice in the Official Gazette regarding the dissolution of the said LLP.
What is the validity period of the name approved for LLP?
The approved name of LLP shall be valid for a period of 3 months from the date of approval.
Can a LLP undertake Not-for-Profit activities?
No. One of the requisite of an LLP is to carry on business for profit.
Will the assets and liabilities of the firm be transferred automatically to LLP?
All tangible as well intangible property vested in the firm, all assets, interests, rights, privileges, liabilities, obligations relating to the firm and the whole of the undertaking of the firm shall be transferred to and shall vest in the LLP without further assurance, act or deed.
When is an LLP required to get its books audited?
If the LLP has a turnover of Rs.40 lakhs or more and/or has a capital contribution of Rs.25 lakhs or more, the financial statements should be audited.
What are the compliance requirements for LLPs?
Every LLP is required to maintain annual accounts reflecting true and fair view of its state of affairs. A statement off accounts and solvency shall be filed by every LLP with the registrar of LLP every year.
Can the losses or unabsorbed depreciation of the proprietorship concern be carried to the LLP?
The accumulated loss and unabsorbed depreciation of firm is deemed to be loss/depreciation of the successor LLP for the previous year in which conversion was effected. Thus such loss can be carried for further eight years in the hands of the successor LLP.