The Limited Liability Partnership has been emerged as a hybrid form of entity with features of Company as well as Partnership. The separate legislation has been framed for functioning and governing LLPs. The Limited Liability Partnership Act, 2008 and rules made there under. There are numerous LLPs which were incorporated but have not done any business or stop doing business. In order to reduce the number of bogus entities, this is important to provide an ease in procedure of winding up. There are two ways of winding up of LLP first is voluntary winding up and second is compulsory winding up (by tribunal).

If partners want to wind up the LLP the process they need to opt is of voluntary winding up. It is pertinent to note here that in case winding up of LLPs, procedure for winding up is different for functioning and de-functioning LLPs. For winding up of functioning LLPs the procedure is laid down in Limited Liability Partnership (Winding up and Dissolution) Rules, 2010 and for defunct LLPs the ministry had specifically notified Form-24 in Limited Liability Partnership (Amendments) Rules, 2017 for granting procedural relief to those LLPs which are not doing business means which are defunct.


For winding up of Defunct LLP the procedure is less complicated as designated partners to file Form-24 only.

Pre-requisites Conditions for filing Form-24

1. Cease all commercial operations (Cessation of commercial operation means LLP ceased to carry on its revenue generating business and the transactions such as receipt of money from debtors or payment of money to creditors, subsequent to such cessation will not form part of revenue generating business of LLP).

2. Close Bank Account(s) opened in the name of LLP and obtain letter evidencing the closure from the Bank.

3. All Creditors need to be paid off.

4. LLP agreement if not filed with MCA , need to be filed with the amendments done so far.

5. Form-8 and Form-11 up to the end of the Financial Year in which LLP ceased to carry business activity must be filed before filing Form- 24.

6. All assets need to be disposed off to pay liabilities of the LLP, surplus assets if any shall be distributed amongst the partners.

Enclosures to Form 24-

1. Affidavit and Declaration by all designated partners declaring that

  • The LLP ceased to carry or has not commenced business activity.
  • The LLP has no liability and Partners will indemnify the liability arising after striking off the name from the Register.
  • The LLP has no bank account opened on its name and where it had opened the same has been closed together with certificate of closer.
  • The LLP has not filed any income tax return where it had not carried any business activity since its incorporation, wherever applicable.

2. Copy of latest Income Tax Return and copy of acknowledgment of the same, if LLP commenced business.

3. Deed of LLP

4. Certificate by Practising Charted Accountant showing NIL Assets and NIL Liability of LLP, the certificate need to be obtained not earlier than 30 days of filing Form-24.

The Form-24 need to be filed with MCA, form if accepted, the concerned Registrar of Companies would cause a notice to be published on the MCA website announcing the striking off of the LLP.


In case where LLP is functioning and partners want to wind up the LLP, the procedure is laid down under Limited Liability Partnership (Winding up and Dissolution) Rules, 2010.

Step by Step procedure is as follows-

1. Pass resolution for winding up by taking approval of three-fourth of total number of partners.

2. File copy of Resolution to the registrar within 30 days in Form No. 1

3. Declaration of solvency need to be filed by majority of designated partners in Form No. 2 verified by affidavit declaring that LLP is able to pay its debt or will be able to pay the debt within one year of commencement of winding up. Declaration need to-

  • Contain statement that LLP not wound up to defraud any person or persons.
  • Accompanied by Statement of Assets and Liabilities in Form No. 4 for period upto which accounts are prepared latest before filing declaration duly attested by two designated partners.
  • Accompanied by Report of valuation of assets prepared by valuer.

4. The declaration need to be filed with registrar in Form No. 3 within 15 days of passing of resolution.

5. Take approval of Creditors (Secured and Unsecured ) for winding up and a copy of above mentioned declaration need to be send them by speed post with amount due to each of creditor and offer for acceptance for them.

6. Creditors shall give their consent or opinion within 30 days of receipt of the declaration where Creditors two-third in value give consent that-

  • In interest of Creditors and Partners the LLP should be wound up by Partners, the LLP will be wound up by Partners.
  • The LLP will not be able to pay its debt by selling its assets in winding and propose that the LLP should be wound up by Creditors, the LLP will be wound up by Creditors.
  • The LLP will not be able to pay its debt by selling its assets in winding and propose that the LLP should be wound up by Tribunal, the LLP will be wound up by Tribunal and application for the same need to filed before Tribunal within fourteen days.

7. The Declaration need to be filed with the registrar in Form No. 5 within 15 days of receipt of consent of creditors.

8. After receiving consent of Creditors, within 14 days a notice of voluntary winding up need to be publish in a Newspaper circulating in the district where registered/ principle office of LLP is situated.

9. The LLP Liquidator is appointed within 30 days of-

  • Passing of resolution in case where no creditors.
  • Receiving consent of creditors

The liquidator is appointed by partners but if consent of 2/3 creditors is not received the creditors may appoint the another liquidator and fix the remuneration and liquidator appointed by the creditors will be the liquidator. But if creditors has neither given the consent nor appointed the another liquidator the liquidator appointed by the partners will be considered as liquidator. The Tribunal may also appoint the liquidator and fix the remuneration. The authority to remove the liquidator is with tribunal after giving reasonable hearing opportunity.

The Liquidator after his appointment is required to file Form No. 6 disclosing conflict of interest and lack of independence if any to partners or creditors as the case may be.

10. The liquidator shall settle the list of creditors or partners, maintain books and record of accounts, pay the debts and adjust amongst the partners.

11. The liquidator shall report the progress of winding up to the partners or creditors Quarterly (31st March, 30th June, 30th September and 31st December) in Form No. 8.

12. On disposal of all assets and affairs of LLP the liquidator shall give the report in Form No.9 showing assets and debts which has been disposed off to the partners and creditors.

13. Two-third of total number of partners or value of creditors, as the case may be shall need to approve the winding up within 30 days of receipt of report by the liquidator.

14. The liquidator shall send the final copy of accounts and report in Form No. 10 to the registrar and to the tribunal within 15 days of passing of resolution.

15. The tribunal if satisfied shall pass the order of winding up within 60 days and it will be binding on all the parties.

16. The liquidator shall file order of tribunal in Form No. 11 to the registrar within 30 days of receipt of order from tribunal.

17. The registrar, on receipt of the order of tribunal shall publish in official gazette that the LLP stands dissolved.

18. The cost, expenses and remuneration of liquidator for winding up is paid out of assets of LLP and will have priority over all other claims.

In a nutshell it can be said that if partners want to wind up their LLP voluntarily they may opt any of the above way as applicable. The legislature by laying down a specific procedure of winding up has provided an ease to the LLPs which has not commenced their business or become defunct.


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  1. Amrit says:

    My query is, Can the partners distribute the assets amongst themselves in case of winding up of an LLP? Given, that the LLP has no outside obligations.

  2. Lean says:

    Can you help me with below quires :
    1) Both Partner in LLP would like to windup voluntary what shall be followed.
    2) We have form LLP on Sept 2019 as well don’t have any back account, what compliance we need to follow?
    3) What would be cost for winding up/closing the LLP.


    All assets need to be disposed off to pay liabilities of the LLP, surplus assets if any shall be distributed amongst the partners.
    I think we can’t distribute to partner capital if any surplus is there for distribution we have reduce the capital by filling Form 3

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September 2021