LLP Form 24

kbadmin

1 month ago

Introduction

LLP Form 24 : Limited Liability Partnerships (LLPs) are a preferred business structure in India due to their flexibility, limited liability benefits, and lower compliance requirements. However, in some cases, LLPs may need to close their operations permanently. To do so, they must follow a legal process prescribed by the Ministry of Corporate Affairs (MCA), which includes filing LLP Form 24 for the closure of the LLP.

Definition: What is LLP Form 24?

LLP Form 24 is a statutory form prescribed by the MCA that allows LLPs to apply for voluntary closure or strike-off under the Limited Liability Partnership Act, 2008.

Key Features of LLP Form 24:

Used for closing an LLP that is inactive or has no liabilities.
Allows an LLP to apply for strike-off from the MCA’s register.
Ensures the legal winding-up process is compliant and transparent.
Requires partners’ approval, financial statements, and other documents.
Reduces the compliance burden by legally dissolving the LLP.

Application: When is LLP Form 24 Required?

Who Should File LLP Form 24?

An LLP must file Form 24 if it meets the following criteria:

Has not conducted business for at least one year OR never commenced business.
Has no pending debts, liabilities, or creditors.
All partners agree to the closure.
The LLP bank account (if any) has been closed.

Documents Required for LLP Form 24 Filing

Consent letters from partners approving the closure.
Indemnity Bond signed by all partners.
Statement of assets and liabilities (not older than 30 days before filing).
Affidavit from partners declaring that the LLP has no liabilities.
Bank closure certificate if an LLP bank account was opened.
Income Tax Return (ITR) acknowledgment if filed.

Deadline for Filing LLP Form 24

There is no specific deadline, but LLPs must ensure compliance before submission.

Benefits of Filing LLP Form 24

1. Legal Closure of LLP

Ensures the LLP is legally closed and removed from government records.

2. Avoids Non-Compliance Penalties

If an LLP is inactive but not closed properly, it continues to incur penalties for non-compliance.

3. Saves Compliance Costs

No need to file annual returns, financial statements, or pay government fees after closure.

4. Protects Partners from Legal Liabilities

Legally closing an LLP ensures partners are not held accountable for future obligations.

5. Simplifies Business Exit Strategy

Helps entrepreneurs exit the LLP structure easily and focus on new ventures.

Limitations of LLP Form 24

1. Cannot Be Filed If Liabilities Exist

LLP Form 24 is only applicable to LLPs without pending debts.

2. Requires Several Legal Documents

Partners must arrange for affidavits, indemnity bonds, and financial statements before filing.

3. Time-Consuming Process

The ROC takes time to verify documents and approve dissolution, causing delays.

4. Cannot Be Revoked After Approval

Once the LLP is struck off, it cannot be revived unless restored through a legal process.

Process of Filing LLP Form 24

Step-by-Step Procedure

Step 1: Pass a Resolution for Closure

Conduct a meeting with all partners and pass a resolution approving the closure.

Step 2: Prepare Necessary Documents

Arrange for affidavits, indemnity bonds, financial statements, and ITR acknowledgment.

Step 3: Close LLP’s Bank Account

If the LLP has a bank account, it must be closed before applying for dissolution.

Step 4: Fill in LLP Form 24 Details

Provide details about the LLP, partners, reason for closure, and supporting documents.

Step 5: Digital Signature of Designated Partner

One of the designated partners must digitally sign the form before submission.

Step 6: Submit the Form and Pay Fees

File the form online through the MCA portal (www.mca.gov.in) and pay applicable fees.

Step 7: Approval from ROC

The Registrar of Companies (ROC) reviews and approves the closure application.

Comparative Table: LLP Form 24 vs. LLP Form 17

Feature	LLP Form 24	LLP Form 17
Purpose	Voluntary closure of LLP	Conversion of LLP to Private Company
Filing Deadline	No specific deadline	Within 30 days of conversion decision
Required Documents	Affidavit, indemnity bond, bank closure proof	LLP agreement, approval documents
Approval Authority	ROC	ROC
Penalty for Late Filing	None	₹100 per day

Conclusion

Filing LLP Form 24 is a crucial step in legally closing an LLP. It ensures that the LLP is struck off from government records, prevents compliance penalties, and simplifies the exit process for business owners.

For LLPs that have ceased operations, timely filing of Form 24 helps avoid unnecessary compliance costs. Entrepreneurs planning to shut down their LLP should consult legal experts like Company Secretaries (CS) or Chartered Accountants (CA) for smooth processing.