Most LLPs that need closing were never really open. They were incorporated for a venture that did not proceed, or to hold a name, or as one of several entities a founder set up while deciding on a structure. They have no assets, no liabilities and no history — and they are accruing one hundred rupees a day in late filing fees on two annual forms that nobody has thought about in years.
For that population the answer is striking off, and the only real obstacle is the cost of clearing the backlog first. For LLPs that actually traded, held assets or owe money, striking off is the wrong instrument entirely and using it leaves the underlying position unresolved.
N D Savla & Associates closes LLPs for clients across Mumbai, Navi Mumbai, Thane, Panvel and Goa — assessing which route applies, quantifying the regularisation cost before anything is committed, and taking the strike off application or the liquidation through to completion.
Which Route Applies?
Three mechanisms exist and they are not alternatives. Which one applies is determined by the LLP’s actual position, not by preference.
| Route | When it applies | How it works | Realistic timeline |
|---|
| Striking off — Form 24 | LLP not carrying on business for a year or more, or never commenced; no assets and no liabilities | Application to the Registrar under Rule 37 with consent of all partners | Four to six months from filing |
| Voluntary liquidation | Solvent LLP with assets to realise or liabilities to settle | Liquidator appointed under Section 59 of the Insolvency and Bankruptcy Code, with a declaration of solvency | Around a year for a straightforward case |
| Insolvency resolution or liquidation | LLP unable to pay its debts | Proceedings before the Tribunal under the Insolvency and Bankruptcy Code | Governed by the statutory timelines under the Code |
| Winding up by the Tribunal | Specified grounds under the LLP Act, including where it is just and equitable | Petition to the Tribunal | Longest route; rarely chosen voluntarily |
An LLP is a corporate person for the purposes of the Insolvency and Bankruptcy Code, 2016, which is why the voluntary liquidation and insolvency routes are available to it in the same way as to a company. Advisers who treat LLP closure as governed only by the LLP Act miss the route that is actually appropriate for an LLP with a balance sheet.
What Does Striking Off Require?
Rule 37 of the Limited Liability Partnership Rules, 2009 sets the conditions, and every one of them has to be satisfied on the date of the application.
- The LLP has not carried on any business or operation for one year or more, or has not commenced business since incorporation
- All partners consent to the application
- The LLP has no assets and no liabilities as at the date of application
- Bank accounts opened in the name of the LLP have been closed, with a certificate from the bank confirming it
- Overdue annual returns and statements of account have been filed up to the end of the financial year in which the LLP ceased to carry on business
- An affidavit and indemnity from every designated partner, and a statement of account showing nil assets and liabilities certified by a Chartered Accountant in practice
- Where the LLP has been registered under any other law, consent of the concerned regulatory authority
The requirement to clear overdue filings before applying is what stops most defunct LLPs from being closed. With the additional fee running at one hundred rupees a day per form with no cap, an LLP four years in default can face a regularisation cost of several lakh rupees before it can even apply to be struck off. Quantify this before deciding anything, and check whether a settlement or facilitation scheme is currently open.
How Did LLP Closure Develop?
The closure routes available to an LLP were assembled from three different statutes over a decade, which is why they sit together so awkwardly.
The Limited Liability Partnership Act, 2008 provided for winding up in Sections 63 to 65 — voluntary winding up and winding up by the Tribunal, with detailed machinery to be prescribed by rules. Those rules arrived as the Limited Liability Partnership (Winding up and Dissolution) Rules, 2012, which set out a court-supervised process modelled on company winding up. It was comprehensive and, for the kind of entity most LLPs turned out to be, entirely disproportionate. An LLP incorporated for a project that never started did not need a liquidator, a creditors’ meeting and a Tribunal order.
The Ministry recognised this quickly. The Limited Liability Partnership (Amendment) Rules, 2017 inserted Rule 37 and Form 24, creating an administrative striking off route for defunct LLPs with no assets and no liabilities. This mirrored what Section 248 of the Companies Act, 2013 had done for companies, and it became the route the overwhelming majority of LLP closures now take.
The insolvency dimension arrived from a different direction entirely. The Insolvency and Bankruptcy Code, 2016 defined a corporate person to include a limited liability partnership, which brought LLPs within the corporate insolvency resolution process and, importantly, within the voluntary liquidation mechanism under Section 59. That gave a solvent LLP with assets and liabilities a proper realisation and distribution process for the first time, conducted by a registered insolvency professional rather than through the 2012 winding up rules. In practice the Code route displaced the older voluntary winding up machinery.
The wider LLP framework was then modernised by the Limited Liability Partnership (Amendment) Act, 2021, notified in August 2021 and in force from 1 April 2022. It introduced the small LLP with reduced penalties, decriminalised a substantial group of offences in favour of civil adjudication, and provided for compounding — changes that reduced the consequences of the defaults that so often accompany a dormant LLP. Administration moved to the MCA21 V3 platform through 2022.
The unresolved problem is the uncapped daily fee. Because Form 11 and Form 8 carry one hundred rupees a day with no ceiling, and because striking off requires those filings to be current, the cost of closing a long-dormant LLP can exceed anything the entity was ever worth. Periodic settlement schemes have addressed this episodically, and a Companies Compliance Facilitation Scheme in 2026 offered a late-filing relief window, but no permanent cap has been introduced.
The practical consequence is that timing matters more in LLP closure than in company closure. An LLP that will not trade again should be closed as soon as that is known, because every month of delay adds to the regularisation cost that closure itself requires.
How Is an LLP Closed — Step by Step?
- Establish the actual position before choosing a route. Assets, liabilities, bank balances, pending contracts, tax positions and any registration held. An LLP with a bank balance, a receivable or an unpaid creditor is not a strike off candidate. Where there are assets to realise, voluntary liquidation under the Insolvency and Bankruptcy Code is the correct mechanism.
- Quantify the regularisation cost. Compute the outstanding Form 11 and Form 8 filings and the accumulated additional fee at one hundred rupees per day per form. Check whether any settlement or facilitation scheme is currently open, because the difference between filing inside and outside a scheme window can be several times the underlying amount.
- File the overdue returns. The statement of account and solvency and the annual return must be current up to the end of the financial year in which the LLP ceased operations. Where partners changed during the dormant period and Form 3 and Form 4 were never filed, those have to be caught up as well before the record will reconcile.
- Close the bank accounts and obtain the certificate. Every account in the LLP’s name must be closed, with a certificate from the bank confirming closure. Banks are frequently slow with this and it should be started early, because the application cannot be made without it.
- Obtain partner consent, affidavits and the indemnity. All partners must consent to the application. Each designated partner provides an affidavit and an indemnity in the prescribed terms. Where a partner is unreachable or unwilling, the strike off route is unavailable and the position needs to be resolved before anything else can proceed.
- Prepare the certified statement of account. A statement showing nil assets and liabilities, made up to a date not earlier than thirty days before the application, certified by a Chartered Accountant in practice. Where the LLP was above the audit thresholds in its trading years, the historical accounts should be in order before this is certified.
- File Form 24 with the Registrar. The application is made on the MCA portal at mca.gov.in with the consent, affidavits, indemnity, statement of account, bank closure certificate and any regulatory consent required. The Registrar publishes notice of the proposed striking off and, absent objection, strikes the name off and publishes the dissolution.
- Deal with the aftermath. Cancel GST and other registrations, close the income tax position, and retain the records — liabilities that arose while the LLP was operating are not extinguished by dissolution, and the designated partners remain answerable for them. Where partners hold Director Identification Numbers, their own KYC obligations continue independently.
Which LLPs Need Which Route?
Never-traded and abandoned LLPs
The largest category by far, and almost always a Form 24 case. The only real decision is whether to regularise now or wait for a scheme window, and that depends on how long the default has run. Founders who set up several entities while choosing a structure frequently hold two or three of these and should deal with all of them together, since the daily fee runs on each independently.
Trading LLPs winding down in an orderly way
Assets to sell, receivables to collect, creditors to pay and a surplus to distribute among partners. This is voluntary liquidation under the Code, conducted by a registered insolvency professional, and the process is designed precisely for it. Attempting a strike off by first informally distributing everything leaves creditors unaddressed and the partners exposed.
LLPs unable to pay their debts
Where the LLP is insolvent, the Code applies as it does to a company — the corporate insolvency resolution process on the application of a financial or operational creditor or the LLP itself. Insolvency proceedings are not a closure mechanism the partners control, and taking advice before a creditor moves is materially better than after.
LLPs that should be kept rather than closed
Where the LLP holds a name, a registration, a licence or a contract with continuing value, closure destroys it. Unlike a company, an LLP has no dormant status regime to fall back on — the filings continue regardless. Where the entity is genuinely worth keeping, the answer is to maintain the two annual filings properly rather than to let them lapse, and groups holding both companies and LLPs should note that the dormancy option available to companies has no LLP equivalent.
Why Choose N D Savla & Associates?
- We establish the route from the balance sheet, not the preference — An LLP with assets or liabilities cannot be struck off, and attempting it leaves the underlying position unresolved. Testing the actual financial position first is what prevents a wasted application.
- The regularisation cost quantified before you commit — The overdue filings have to be cleared before the strike off application, and with an uncapped daily fee that can be the largest single cost in the exercise. Clients should know the number before deciding, not after.
- Scheme windows watched — Settlement and facilitation schemes periodically reduce additional fees for defaulting entities. Timing a regularisation to coincide with one is frequently the difference between closure being economic and not.
- Both the LLP Act and the Code covered — Strike off, voluntary liquidation and insolvency sit in different statutes, and the right answer depends on facts rather than on which statute the adviser is familiar with. We work across all three.
- Six offices across Maharashtra and Goa — Andheri, Charni Road, Vashi, Thane, New Panvel and Panaji. Closure needs consents and affidavits from every partner and a bank closure certificate obtained in person, and partners are rarely all in one place by the time an LLP is being wound up.
Frequently Asked Questions on Closing an LLP
What is the simplest way to close an LLP?
Striking off under Rule 37 of the Limited Liability Partnership Rules, 2009 by filing Form 24. It is available where the LLP has not carried on business for one year or more, or has never commenced business, and has no assets or liabilities. All partners must consent, the LLP must have closed its bank accounts, and it must have filed its overdue annual returns and statements of account up to the date it ceased operations. It is by far the cheapest and quickest route, and it is available to the large majority of LLPs that need closing.
When is voluntary liquidation required instead of strike off?
Where the LLP has assets to realise or liabilities to settle. An LLP is a corporate person under the Insolvency and Bankruptcy Code, 2016, so a solvent LLP may be wound up voluntarily under Section 59 of that Code through an appointed liquidator, with a declaration of solvency by the designated partners. This route deals properly with realising assets, discharging creditors and distributing the surplus to partners, none of which strike off does. Strike off assumes there is nothing to distribute.
Can an LLP with pending Form 11 and Form 8 filings be struck off?
Not without regularising them first. The strike off application requires the overdue annual return and statement of account and solvency to be filed up to the end of the financial year in which the LLP ceased to carry on business. Because the additional fee on these forms runs at one hundred rupees a day with no upper limit, an LLP several years in default faces a substantial regularisation cost before it can even apply to close. That cost is the main reason defunct LLPs are left on the register.
What happens if we simply abandon the LLP?
The daily additional fee on Form 11 and Form 8 continues to accumulate without limit, and the designated partners carry the compliance liability personally. The Registrar may in time strike the LLP off on its own motion, but that is not a controlled outcome and it does not extinguish liabilities that arose while the LLP was operating. Designated partners also hold Director Identification Numbers, and a pattern of default in one entity is visible against their record across every other appointment they hold.
How long does closure take?
A strike off application, where the filings are current and the partners are agreed, typically concludes within four to six months of filing Form 24, including the period for which the Registrar publishes the notice. Voluntary liquidation takes considerably longer because the liquidator must realise assets, call for and verify claims, and distribute — a year is a realistic expectation for a straightforward case. Winding up by the Tribunal is the longest route and is rarely chosen voluntarily.
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