Can LLP close without paying back partner loan?
This query is : Resolved
18 June 2020
A LLP has taken loan from 2 partners. Now the business is not working and LLP needs to be shut down.
But there is no money to pay back partner loan. The loan amount was capitalized over the years.
Can LLP close without paying back partner loan?
Can LLP write off partner loan and then close?
What is the process in such a scenario?
But there is no money to pay back partner loan. The loan amount was capitalized over the years.
Can LLP close without paying back partner loan?
Can LLP write off partner loan and then close?
What is the process in such a scenario?
18 June 2020
Write off partner loan and then close.
09 July 2020
hello sir thank you for your reply.
but will i have to pay income tax on write off amount?
also is it better to convert partners loan into capital account and then go for closer? again i s there any income tax liability which needs to be take care of here?
but will i have to pay income tax on write off amount?
also is it better to convert partners loan into capital account and then go for closer? again i s there any income tax liability which needs to be take care of here?
09 July 2020
No income tax payable as it's partner's loan. Transfer the loan to capital account and close it.
16 July 2020
Thank you very much sir. Converting loan into capital is the only possibility cause company has no money to pay income tax if write off this done
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