Limited Liability Partnerships (LLPs) are a popular business structure in India, especially in Delhi NCR, as they combine the benefits of both partnerships and corporations. An LLP offers limited liability to its partners while allowing flexibility in operations. This guide will walk you through the LLP registration process and the steps for LLP closure in Delhi NCR.

Part 1: LLP Registration in Delhi NCR

Registering an LLP in Delhi NCR is a straightforward process. Here’s a step-by-step guide to help you set up your LLP:

1. Choose a Unique Name for Your LLP

• The first step is selecting a unique name for your LLP. The name must comply with the naming guidelines issued by the Ministry of Corporate Affairs (MCA).
• The chosen name must not be identical to any existing company or LLP, and it should reflect the nature of the business.

2. Obtain Digital Signature Certificates (DSC)

• All partners of the LLP need to obtain Digital Signature Certificates (DSC), which are necessary for filing forms online with the MCA.
• DSCs can be obtained from certifying authorities authorized by the government.

3. Apply for Director Identification Number (DIN)

• Each designated partner of the LLP must have a Director Identification Number (DIN).
• If a partner does not already have a DIN, it can be applied for while submitting the registration forms.

4. Reserve the LLP Name

• File Form RUN-LLP (Reserve Unique Name – Limited Liability Partnership) to reserve the name for your LLP.
• The Registrar will review the application and either approve or reject the name based on availability and compliance with regulations. Once approved, the name is reserved for 90 days.

5. File Incorporation Documents (Form FiLLiP)

• After the name is approved, file the Form FiLLiP (Form for incorporation of LLP) with the Registrar of Companies (RoC) along with required documents, which include:
  • Proof of registered office (such as rent agreement or ownership proof)
  • Partner details (identity and address proof)
  • Subscriber’s sheet signed by all partners
• This form also includes the option to apply for a DIN for the designated partners who do not already have one.

6. Draft and Submit the LLP Agreement

• The LLP Agreement is the document that outlines the rights, duties, and profit-sharing ratios among partners. It must be filed within 30 days of incorporation.
• The agreement needs to be drafted on stamp paper, and the value of the stamp paper depends on the state of registration. In Delhi NCR, the stamp duty varies based on the capital contribution of the LLP.

7. Certificate of Incorporation

• Once all documents are approved by the RoC, a Certificate of Incorporation is issued. This certificate confirms the legal existence of the LLP.
• The LLP now has a unique LLP Identification Number (LLPIN), and it can officially commence business operations.

8. PAN and TAN Application

• After incorporation, apply for the Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the LLP. These are essential for filing taxes and complying with statutory requirements.

Part 2: LLP Closure in Delhi NCR

When an LLP is no longer operational, it’s important to officially close it to avoid compliance issues and penalties. There are two main ways to close an LLP in Delhi NCR: Voluntary Closure and Compulsory Dissolution by the court.

Voluntary Closure (Striking Off)

If the LLP has not commenced any business or activity, or it has ceased operations for at least one year, it can apply for voluntary closure by filing LLP Form 24 with the MCA.

Steps for Voluntary Closure:

1. Pass a Resolution: A resolution must be passed by all partners agreeing to close the LLP. This resolution should be documented and signed by all partners.
2. Settle Liabilities: Ensure that all liabilities of the LLP are settled. If the LLP has any outstanding debts or obligations, they must be cleared before the closure process begins.
3. Prepare Necessary Documents: The following documents are required for filing Form 24:

• Indemnity Bond: Signed by all partners, confirming that there are no liabilities outstanding.
• Affidavit: A declaration by the partners stating that the LLP has not commenced business or has ceased operations.
• Consent of Partners: Written consent from all partners regarding the closure.
• Latest Financial Statements: Statements showing the LLP’s financial position at the time of closure of LLP.
• Income Tax Return (ITR): The LLP should have filed its most recent ITR with the tax authorities.

Compulsory Dissolution

If the LLP is involved in any unlawful activities, has defaulted on compliance for a long time, or is unable to pay debts, it can be dissolved by an order of the National Company Law Tribunal (NCLT).

Advantages of LLP Closure:

1. No Further Liabilities: Once the LLP is dissolved, the partners are no longer liable for any future debts or obligations.
2. Cost Savings: Dissolving an inactive LLP can help save on compliance costs like annual filing fees, audits, and other statutory obligations.
3. Legal Compliance: Properly closing an LLP ensures that you are compliant with the law and avoid penalties for non-compliance with filing requirements.

Disadvantages of LLP Closure:

1. Loss of Business Entity: Once the LLP is closed, it ceases to exist, and the business cannot continue under the same name or entity.
2. Time-Consuming Process: Closing an LLP requires time and effort, especially in gathering documents, settling liabilities, and waiting for the approval of authorities.
3. Cost Involved: Although closure can save costs in the long term, the process itself involves costs, such as legal fees, stamp duty for affidavits, and professional fees for compliance.

Conclusion

The process of LLP registration in Delhi NCR is relatively simple, but it requires attention to detail, especially in choosing the right name, drafting the agreement, and filing the necessary forms. Similarly, closing an LLP is an important step when the business is no longer operational, as it avoids penalties and ensures proper legal closure. Whether you are setting up or winding down an LLP, it’s critical to follow all regulatory guidelines and ensure compliance with the Ministry of Corporate Affairs to operate smoothly within the legal framework.

If you still have any queries regarding Private Limited Company Registration, LLP registration, LLP closure, company Closure, GST registration

 then, you can connect to our expert team at info@compliancecalendar.in or call us at 9988424211.