How to Dissolve an LLP Voluntarily? 📝🏢
A Limited Liability Partnership (LLP) is a popular business structure offering the benefits of limited liability and flexible management. However, there may come a time when partners decide to close down the LLP voluntarily, due to business inactivity, mutual agreement, or other strategic reasons. This article provides a comprehensive guide on how to dissolve an LLP voluntarily in India, covering the process, documentation, timelines, and legal aspects in detail.
Before initiating the process, it is essential to identify valid reasons for dissolving an LLP:
Mutual decision of partners to discontinue business operations.
Inactivity or no commercial operations since incorporation.
Financial non-viability or continuous losses.
Completion of project or specific purpose for which LLP was formed.
Shift to a different business structure.
Voluntary dissolution of an LLP is governed by the Limited Liability Partnership Act, 2008 and the LLP (Winding Up and Dissolution) Rules, 2012. An LLP can be dissolved either by:
Voluntary Winding Up by Partners
Striking Off by Registrar (if applicable)
This article focuses on the voluntary winding up process initiated by the partners themselves.
Pass a resolution with at least 3/4th majority of the partners consenting to the dissolution.
Authorize a partner or designated partner to initiate the process and complete required formalities.
Ensure all debts, dues, and liabilities of the LLP are cleared.
Obtain No Dues Certificate from creditors (if applicable).
Prepare the final statement of accounts reflecting zero liabilities.
Submit an application for striking off the LLP by filing Form 24 to the Registrar of Companies (ROC).
Attach necessary documents:
Copy of resolution for dissolution.
Statement of accounts not older than 30 days.
Affidavits and indemnity bond signed by all partners.
Consent letters from partners.
Income Tax Return Acknowledgement (if applicable).
The ROC reviews the application and documents.
If satisfied, the ROC issues a public notice on the MCA portal for 30 days, inviting objections.
After the expiry of 30 days, if no objections are received, the ROC strikes off the LLP name from the register.
The LLP is considered dissolved and no longer exists as a legal entity.
Resolution for closure signed by all partners.
Statement of accounts showing nil assets and liabilities.
Affidavits and indemnity bonds from all partners.
PAN Card and LLP Agreement copies.
Income Tax Return acknowledgment (if applicable).
Latest address proof of partners.
The voluntary dissolution process usually takes 2 to 3 months, subject to timely document submission and ROC processing.
The LLP must not have any outstanding debts or legal disputes.
All statutory filings, such as annual returns and statements of accounts, should be updated.
An LLP under investigation or legal proceedings cannot apply for voluntary dissolution.
The ROC has discretion to reject the application if documents are incomplete or misleading.
Avoids future legal complications or penalties.
Official closure of LLP's legal existence.
Allows partners to focus on other ventures.
Protects partners from future liabilities.
| Basis | Striking Off (Form 24) | Voluntary Winding Up |
|---|---|---|
| Applicability | LLP not carrying business | LLP wishes to wind up operations |
| Liabilities | No outstanding liabilities | Liabilities must be settled |
| Legal Process | File Form 24 to ROC | Follow formal winding-up procedure |
| Timeline | 2-3 months | 3-6 months |
Voluntary dissolution of an LLP is a structured process that requires careful compliance with legal formalities and submission of accurate documentation. Seeking professional assistance from Chartered Accountants or legal experts is advisable to ensure hassle-free closure.
If you are planning to dissolve your LLP, ensure all statutory requirements are fulfilled to avoid future legal or financial complications.