Limited Liability Partnership or famously known as LLP, which is limited liability partnership, is a company where all partners have limited liabilities. Here, one partner is not responsible for other partners’ diligence or negligence.
Requirements for closing Limited Liability Partnership
Voluntary closing of LLP:
An LLP closing can be initiated voluntarily or by a tribunal. If a LLP is to initiate voluntarily closing, then the LLP must pass a resolution to shut the LLP with approval of at least three-fourths of the total number of Partners. If the LLP has lenders, secured or unsecured, then the approval of the lenders would also be required for closing of the LLP.
Compulsory closing of LLP:
This may happen due to following reasons,
Procedure for Limited Liability Partnership Closure
There is not much of a difference with regard to ease of closing between an LLP and a Private Limited Company.
A Private Limited Company brings certain other advantages, such as the ability to issue stock options, appoint independent directors, dilute stake to investors and valuable employees and a lot more.
At least a year should have passed from the date of incorporation before the Company files for closing to the Registrar of Companies.
A resolution of Directors approving the closing of the Company and the same being declared with the condition that there are no pending debts is a key requirement for filing the voluntary closing of the Company.
If the Company fails to comply with the timelines, a fine or penalty is incurred upon the Directors from starting another Company.
Within 7 days of application submission, the Private Limited Company must notify the creditors, shareholders, employees, trustees, and other directors.
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