Bank Account Closure Letter
Winding Up - LLP
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Winding up of an LLP
The LLPs are newly formed business entities that were introduced through the LLP Act,2008 in India. The Limited Liabilities enjoy the audit exemption if the annual turnover of the LLP is less than Rs40 lakh or the capital contribution is less than Rs.25 lakhs.
The Limited Liability partnership is a basic partnership in which all the partners share limited liabilities as the LLP is set up under certain legal terms and documentation. There is a specific process as to how an individual can register his or her LLP. As there are advantages of registering as an LLP in India, there are also some disadvantages. Many of them are also unsure about the process of Winding up an LLP. Here, we are going to take a look at how to wind up an LLP in India.
Section 63,64 and 65 of the LLP Act,2008 regulates the process of winding up of the LLP. The Limited Liability Partnership winding up can be initiated voluntarily or by a tribunal. Let us take a look at both in detail.
Winding up of an LLP by the tribunal
The Winding-up of the LLP is initiated by a tribunal for the following reasons:
Voluntary winding-up of an LLP
The LLP winding-up process can be easily initiated with the approval of 3/4th of the partners. To begin with the liquidation process for the LLP the designated partners need to make a declaration that the LLP does not have any debt or that the LLP will pay the debts totally within not more than 1 year from the process of winding up of an LLP.
Also, the LLP partners need to declare that the LLP is not winding up because of any frauds. This statement of the declaration must be prepared along with the statement of the assets and the liabilities until the most recent practicable date right before making the declaration for winding up of the LLPs.
Also, a valuation of the assets that are relevant to the LLP should be prepared and submitted, in case of any assets. Voluntary winding up the LLP will be effective from the start date of passing the resolution for the reason of voluntary winding up of the LLP.