—Guide
How to Close an LLP in India: Form 24, Eligibility and Documents
An LLP that stops trading still has to file every year until it's closed. Here's how Form 24 works, who can use it, and what documents it needs.
LLPs are popular precisely because they're light to run. But an LLP that stops doing business doesn't close by itself. It stays on the register, with Form 11 due every May and Form 8 every October, until it's formally closed. The good news is that closing an LLP with nothing left in it is fairly straightforward. This guide explains how.
Why Close a Dormant LLP
- Form 8 and Form 11 are due every year even if the LLP has no business. Late filings attract ₹100 per day, per form, with no upper limit.
- The Registrar can penalise the LLP and its designated partners for missed filings.
- The Registrar can strike off an LLP that isn't carrying on business, and any money left in its bank account becomes hard to recover.
- GST and other registrations stay live, with returns due, until they're cancelled.
Closing an LLP by Strike-off: Form 24
An LLP that has stopped carrying on business can apply to the Registrar to have its name struck off, in Form 24 under the LLP Rules. It's the LLP equivalent of a company's voluntary strike-off, and the route most small LLPs use.
Eligibility
- The LLP isn't carrying on any business or operations.
- All its liabilities have been settled, and it has no assets.
- Its bank account has been closed.
- Its pending Form 8 and Form 11 have been filed, up to the end of the financial year in which it stopped business.
Documents
- A statement of accounts showing nil assets and liabilities, certified by a Chartered Accountant, up to a date within 30 days of filing.
- An affidavit from the designated partners that the LLP has ceased business and has no liabilities.
- Consent of all the partners to the closure.
- An indemnity from the designated partners for any liabilities that surface later.
- Proof that the bank account has been closed, and a copy of the latest income-tax return acknowledgement where applicable.
The process
- File any overdue Form 8 and Form 11, with late fees.
- Settle remaining liabilities and close the bank account.
- Get the statement of accounts certified, and the partners' consents, affidavits and indemnity signed.
- File Form 24, signed with a designated partner's DSC and certified by a practising professional.
- The Registrar issues a public notice inviting objections. If none are received, the LLP's name is struck off and it's dissolved.
When Form 24 Isn't Enough: Voluntary Liquidation
If the LLP still has assets to distribute, contracts to wind up, or creditors to pay, it closes through voluntary liquidation under the Insolvency and Bankruptcy Code instead. The partners declare the LLP solvent, pass a resolution to liquidate it, and appoint an insolvency professional as liquidator, who settles the LLP's affairs before the NCLT passes a dissolution order. It's slower and costlier than Form 24, and only makes sense when there's something to wind up.
Don't Forget the Other Registrations
- GST: apply for cancellation in REG-16 and file the final return (GSTR-10) within three months.
- TDS: file the last returns and surrender the TAN.
- Income tax: file the LLP's final return in ITR-5.
- State registrations: close Professional Tax and Shops and Establishments registrations, and any trade licence.
Common Mistakes
- Applying with pending Form 8 or Form 11, which gets the application rejected.
- Leaving the bank account open with a small balance or pending charges.
- Not getting every partner's consent, including partners who've stepped back from the business.
- Cancelling GST after the LLP is struck off, when it's much harder to file the final return.
Getting Help
Think Filing helps partners close LLPs properly: filing any pending returns, preparing Form 24 with its certified statement and declarations, and cancelling GST and other registrations, so nothing is left behind.