An LLP, whether operational or not, is obligated to file specific annual returns. Failure to comply with this requirement subjects the LLP to penalties and prosecution under the LLP Act. It is crucial to recognize that ceasing business operations does not exempt an LLP from filing annual returns; the LLP remains in existence until the formal LLP closure process is completed. As a distinct legal entity registered in accordance with the law, an LLP must be closed formally as outlined in the LLP Act.
The application for LLP closure must include the specified fee payment, the consent of all partners, affidavits, and indemnity attested by a Chartered Accountant. It should also include copies of the most recent income tax return, the firm’s recent bank account statement, and the authorization documents of all directors or partners. GHR Advisory assists defunct LLPs in completing the LLP closure procedure, ensuring a smooth process with the approval of all partners and the removal of the firm’s name from the register.
Filing Closure of LLP with the Registrar of Companies (ROC) is necessary to update the ROC or MCA database, officially freeing the LLP from its registration.
Failure to file annual returns subjects the LLP to penalties and prosecution under the LLP Act, and designated partners may face similar penalties.
The LLP should be inactive for at least one year, not working from the date of incorporation, and should not own any assets, properties, or liabilities as of the application date.
