INTRODUCTION

Every beginning has an end, and that holds true for businesses too. Forming a Limited Liability Partnership (LLP) gives partners a flexible business structure, but when operations stop making sense—whether due to financial loss, strategic changes, or simply because the venture has served its purpose—the next step is closure. What many entrepreneurs don’t realize is that simply walking away from an LLP does not legally close it. Unless the LLP is properly dissolved or struck off, partners continue to receive notices, annual compliance reminders, and even penalties from authorities.

That’s why understanding the LLP Winding Up Process is crucial. In India, the Ministry of Corporate Affairs (MCA) provides three legal pathways:

1. Voluntary winding up – a structured liquidation of assets and liabilities by partners.

2. Strike-off / Voluntary closure – a faster route if the LLP has no liabilities.

3. Compulsory winding up – when authorities or creditors initiate proceedings.

With the latest changes under the LLP (Amendment) Rules 2024, these procedures have become both streamlined and stricter. On one hand, CPACE (Centre for Processing Accelerated Corporate Exit) makes strike-offs faster. On the other, documentation must be airtight. Let’s explore how this works, and how Lawfinity helps entrepreneurs close their LLPs without unnecessary hassle.

HOW LAWFINITY SIMPLIFIES SUCH PROCEDURE?

At Lawfinity, we know closing a business is not just a legal formality—it’s a personal decision often filled with mixed emotions. Our role is to take away the stress of navigating forms, notices, and endless paperwork. Here’s how we simplify the process:

1. Compliance Health-Check

We start with a diagnostic review of the LLP’s position—outstanding filings, pending statutory dues, unresolved litigation, or unsettled loans. This helps identify whether strike-off is possible or whether winding up through a liquidator is safer.

2. Choosing the Right Route

Dormant LLPs with no dues: Strike-off using e-Form 24.
Active LLPs with liabilities: Voluntary winding up with a liquidator.
LLPs under investigation or default: Tribunal-driven compulsory winding up.

By analyzing the facts first, we avoid costly rejections later.

3. Document Orchestration

From drafting partner resolutions, indemnity bonds, and affidavits to arranging Chartered Accountant certifications, our team prepares everything in advance. A single missing attachment can push the file back for months—our process avoids that.

4. Filing & Liaison

We directly handle communication with ROC and CPACE. Since closure is now centralized, precision in filings matters more than ever. Lawfinity’s experts ensure timely responses to notices so that cases don’t drag on unnecessarily.

5. Liquidation & Settlement (if applicable)

Where assets and liabilities exist, we coordinate with insolvency professionals and ensure compliance with liquidation steps: realization of assets, payment of creditors, and distribution of remaining funds.

6. Post-Closure Services

We don’t stop at dissolution. We also help partners with:

Closure of bank accounts.
GST cancellation.
PAN surrender (if required).
Document retention guidance to protect against future disputes.

By managing the process end-to-end, Lawfinity turns a complicated legal closure into a structured exit.

DETAILED PATHWAYS OF CLOSURE

1. Voluntary Winding Up – A Step-by-Step Walkthrough

Voluntary winding up applies where the LLP has liabilities or assets that must be formally dealt with.

Step 1: Partner Resolution

A majority of partners (or as per LLP agreement) pass a resolution to wind up the LLP.

Step 2: Appointment of Liquidator

A liquidator—usually a registered insolvency professional—is appointed to manage the process.

Step 3: Filing with Registrar

A declaration of solvency (if applicable) and partner resolution are filed with the Registrar within 30 days.

Step 4: Creditors’ Consent

If creditors exist, their approval is sought. If two-thirds in value agree, the process moves forward.

Step 5: Liquidation Process

The liquidator collects assets, pays creditors, and distributes the surplus to partners.

Step 6: Final Report & Dissolution

After completion, the liquidator files a final report with the Registrar. The LLP is then officially dissolved.

Voluntary winding up is best for LLPs with real operations, contracts, or dues to settle.

1. Strike-Off / Voluntary Closure – The Quick Exit

This is the preferred route for LLPs that never really operated, have become dormant, or have no liabilities. It is executed through e-Form 24.

Key Requirements:

Consent from all partners.
Statement of accounts (not older than 30 days) certified by a Chartered Accountant.
Affidavits and indemnity bonds confirming no pending liabilities.
Filing of overdue returns before closure application.

Process:

Filing of e-Form 24 with documents.
Registrar/CPACE review and publication of notice.
Strike-off order if no objections arise.

Strike-off is the fastest and most cost-effective way to dissolve a clean LLP.

2. Compulsory Winding Up – When Closure Isn’t a Choice

Compulsory winding up is ordered by the Tribunal (NCLT) in cases such as:

LLP carrying business with intent to defraud.
Default in filing statements for years.
Acting against the sovereignty or integrity of India.
At the request of creditors.

Here, the Tribunal appoints a liquidator, supervises investigations, and orders dissolution. This route is usually forced upon LLPs due to non-compliance or fraudulent conduct.

RECENT CHANGES UNDER LLP RULES 2024

Centralized Processing via CPACE: All strike-off applications are now processed centrally for faster resolution.
Stricter Document Verification: e-Form 24 filings are being scrutinized in detail. Errors in affidavits or CA certificates are leading to rejections.
Mandatory Compliance Clearance: LLPs with overdue filings or dues are not eligible for strike-off until issues are resolved.
Transparency for Stakeholders: Public notices allow creditors or stakeholders to object before strike-off is approved.

For entrepreneurs, this means closures are faster if clean, but impossible if records are incomplete.

DOCUMENT CHECKLIST

1. Partner resolution for closure.

2. e-Form 24 (for strike-off) signed with DSC of designated partner.

3. Statement of accounts certified by a CA.

4. Affidavits and indemnity bonds from partners.

5. Updated LLP agreement and amendments.

6. Proof of settlement of all dues.

7. Liquidator’s report (for voluntary winding up).

8. Any pending regulatory approvals or NOC if applicable.

COMMON PITFALLS AND HOW TO AVOID THEM

Pending Filings Ignored: Many LLPs apply for strike-off without filing overdue forms. This leads to instant rejection.
Mismatched Details: Differences between LLP agreement and MCA records create hurdles. Always reconcile data first.
Hidden Liabilities: GST or labour law dues can later be revived against partners. Ensure everything is settled.
Improper CA Certification: Certification by a CA not authorized digitally often leads to rejection.
Bank Accounts Left Open: Banks may refuse to close accounts without dissolution proof. Handle this simultaneously.

COST AND TIMELINE CONSIDERATIONS

Strike-off route:

Government filing fee is nominal.
Professional charges vary from ₹10,000–₹25,000 depending on complexity.
Timeline: 3–6 months.

Voluntary winding up:

Involves liquidator’s fee, professional charges, and government fees.
Costs range from ₹50,000 upwards, depending on liabilities.
Timeline: 6 months to 1 year.

Compulsory winding up:

Legal representation and tribunal proceedings significantly raise costs.
Timeline: Highly uncertain, often over a year.

MUSINGS FROM THE AUTHOR’S INK

Every entrepreneur dreams of growth, but not every venture unfolds as planned. Having seen many closures up close, I believe shutting down cleanly is as important as starting properly. A lingering LLP can haunt partners with notices years later.

The truth is, closure is not failure—it’s clarity. It allows partners to move on without baggage. In fact, some of the most successful business leaders I’ve met have had multiple closures behind them. What set them apart was how responsibly they exited. They tied up loose ends, paid dues, and preserved their reputation.

For me, the LLP winding up process is not just about legal forms—it’s about honouring the effort put into the venture. At Lawfinity, we stand by partners in this transition, ensuring that their business journey ends with dignity, compliance, and peace of mind.