LLP closure, also known as LLP winding up or striking off, is a legal process where a Limited Liability Partnership (LLP) ceases its operations and is formally dissolved. LLPs that are inactive, unable to continue business, or wish to close voluntarily must follow the proper closure procedure to avoid future compliance issues and penalties. The closure process is governed by the Limited Liability Partnership and the Ministry of Corporate Affairs (MCA) regulations.

There are two ways to close an LLP – Voluntary Winding Up and Compulsory Winding Up. In voluntary winding up, the partners mutually agree to dissolve the LLP. A resolution for closure must be passed, and all liabilities, including debts and statutory dues, must be cleared. The LLP must obtain consent from creditors and submit necessary documents, such as financial statements and tax filings, before applying for closure. The designated partners must file Form 24 with the Registrar of Companies (ROC), along with an affidavit, indemnity bond, and a statement of accounts reflecting NIL assets and liabilities.

Compulsory winding up occurs when the National Company Law Tribunal (NCLT) orders the closure due to non-compliance, fraudulent activities, or an inability to pay debts. In such cases, a liquidator is appointed to manage asset distribution and liability settlement before the LLP is dissolved.

To ensure a smooth closure, the LLP must complete all pending tax filings, GST returns, and Income Tax Returns (ITR). Any failure to comply with the closure process may result in penalties, legal complications, and disqualification of designated partners. Seeking professional assistance from chartered accountants (CAs) or company secretaries (CSs) can help in ensuring a hassle-free and legally compliant closure of the LLP.