Description

⚖️ Winding Up of LLP in India

Winding up is the legal procedure to close down the operations of a Limited Liability Partnership (LLP), settle its debts, and distribute the remaining assets among partners. The LLP ceases to exist legally once winding up is complete and its name is struck off from the Registrar of Companies (ROC).

Types of Winding Up

1. Voluntary Winding Up

Initiated by the partners themselves when they mutually decide to close the LLP.

Conditions:

• LLP is not carrying on any business for at least 1 year, or
• Partners pass a resolution with consent of 75% of partners.

2. Compulsory Winding Up (By Tribunal)

Ordered by the National Company Law Tribunal (NCLT) under specific grounds, such as:

• LLP is unable to pay its debts.
• LLP has acted against the sovereignty and integrity of India.
• LLP has defaulted in filing Statement of Accounts or Annual Returns for five consecutive years.
• Tribunal is of the opinion that it is just and equitable to wind up.

📝 Procedure for Voluntary Winding Up

1. Resolution by Partners
   • 3/4th of the partners must agree and pass a resolution.
   • File Form 1 (Declaration of Solvency).
2. Appointment of Liquidator
   • A LLP Liquidator is appointed within 30 days of resolution.
   • File Form 6 to intimate the appointment.
3. Creditors’ Consent (if LLP has creditors)
   • Obtain approval from at least 2/3rd of creditors.
4. Winding Up & Asset Realization
   • The liquidator takes over all affairs, pays liabilities, and distributes surplus (if any).
5. Final Report Submission
   • Submit final accounts and report using Form 9.
   • Apply for dissolution using Form 10.
6. ROC Approval and Strike-off
   • If satisfied, ROC will strike off the LLP’s name and it will be legally dissolved.

🧾 Documents Required

• Resolution for winding up
• Declaration of solvency (Form 1)
• Statement of assets & liabilities
• Consent of creditors (if applicable)
• Liquidator’s report
• Final statement of accounts
• Affidavits and indemnity bonds

🔎 Key Forms Used

Form No.	Purpose
Form 1	Declaration of Solvency
Form 6	Appointment of LLP Liquidator
Form 9	Final accounts and report by liquidator
Form 10	Application for dissolution