Closure of LLP via Form 24

To close an LLP, Form 24 can be used, but there are specific conditions to be met. Since the LLP was incorporated in 2016 and has been inactive since, with no bank account, business, or filings, it's eligible for closure.

¹ However, there's a catch. According to Rule 37, there should be a minimum one-year gap before applying for closure.

 This rule implies that the date of cessation cannot be from the date of incorporation, which seems odd in your case.

Given the circumstances, it's likely that the Registrar may not accept the application for closure with retroactive effects from the incorporation date.

 Instead, you might need to file the overdue returns in Form 8 and Form 11 up to the end of the financial year in which the LLP ceased to carry on its business.

² To proceed, ensure you have the following documents ready: -

 *NIL Statement of Accounts*: Certified by a Chartered Accountant, stating the LLP has no assets or liabilities. -

*IT Return*: Filed for the last financial year. - *Bank Account Closure Certificate*: If the LLP had a bank account, it must be closed, and a certificate obtained. -

 *Partners' Consent*: All partners must provide their consent for the closure. - *Indemnity Bond*: Partners must indemnify any liabilities that may arise after the closure. Consult a professional to ensure you comply with all the requirements and follow the correct procedure for closing the LLP.³ ⁴

Respected Sir

Except incorporation, no action was taken by LLP.

NO ( Bank account, ITR , Form 3,8,11 LLP]

Should we keep cessation date current?

Regards,

Respected Sir

Except incorporation, no action was taken by LLP.

NO ( Bank account, ITR , Form 3,8,11 LLP]

Should we keep cessation date current?

Regards,

Respected Sir

Except incorporation, no action was taken by LLP.

NO ( Bank account, ITR , Form 3,8,11 LLP]

Should we keep cessation date current?

Regards,

Your case involves an LLP incorporated in 2016 that has never been operational (no bank account, transactions, filings, or meetings).

Key Points to Consider:

1. Applicability of Rule 37 (LLP Rules, 2009):
• Rule 37 allows an LLP to apply for strike-off if it has not carried on business for at least one year.
• This means that the LLP must be inactive for at least one financial year after incorporation before applying for closure.
• Closing with an effective date from incorporation contradicts this rule.
2. Date of Cessation Cannot Be the Incorporation Date:
• The LLP legally came into existence upon incorporation (2016), so it cannot cease to exist retroactively.
• The earliest cessation date should be one year from incorporation (i.e., post-2017) to comply with Rule 37.
3. Forms 8 & 11 (Annual Compliance Forms) – Are They Necessary?
• Since the LLP was never operational, no financial statements exist, making Form 8 irrelevant.
• However, failure to file Forms 8 & 11 attracts penalties, but filing Form 24 before regulatory action is taken might help avoid fines.
• The LLP must attach an STK-8 form signed by a CA (showing NIL assets/liabilities), which satisfies the ROC’s requirement. Which in this case you have.
4. Income Tax Return (ITR) Filing:
• Even if the LLP had no transactions, it was still legally required to file NIL ITRs annually.
• Since no return was filed, there could be late penalties under the Income Tax Act. However, if the LLP is dissolved, tax authorities typically do not pursue dormant LLPs aggressively.

Conclusion & Recommendation:

• The correct approach would be to use Form 24 to close the LLP, citing inactivity for at least one full year after incorporation (i.e., from 2017 onward).
• The date of cessation cannot be the incorporation date, but it can be set after the first inactive year.
• Since there were no business activities, the absence of Forms 8 & 11 should not create a major compliance issue once the LLP is dissolved.

Source: Close an LLP

If any LLP that has remained inactive right from its incorporation (having no bank account, no business operations initiated, no filings, and no tax returns) can be closed using Form 24. You must prepare a CA-certified Statement of Accounts (showing zero assets/liabilities) and submit affidavits that clearly declare non-commencement of business. If no bank account was ever opened for the LLP, it should be simply stated in the affidavit.   

Form 24 does not strike off the LLP from its incorporation date, but the ROC accepts closure for non-operational LLPs without requiring past filings when the documentation is accurate and complete.  

In such cases, ROC generally processes the strike-off smoothly because the LLP poses no financial exposure or public risk, thereby making Form 24 the quickest and most cost-effective method for closure. To get your non-operating LLP struck off smoothly, it is often advisable to consult a trusted business compliance (offering end-to-end business services from incorporation to wind-up) services provider like Setindiabiz. It’s the most effective way to set yourself free from the unnecessary compliance of an inoperational LLP.