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VOLUNTARY WINDING UP OF LIMITED LIABILITY PARTNERSHIP

Limited Liability Partnership - LLP - By: - Mr. M. GOVINDARAJAN - Dated:- 11-8-2016 - The Central Government made the Limited Liability Partnership (Winding up and Dissolution) Rules, 2012 ( Rules for short) in supersession of the Limited Liability Partnership (Winding up and Dissolution) Rules, 2010. The Rules came into effect from 10.07.2012. The Rules deal with two types of winding up of Limited Liability Partnership ( LLP for short) namely voluntary winding up and winding up by the Tribunal. .....

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A copy of the resolution passed by the LLP is to be filed with the Registrar in Form No. 1 Commencement of winding up Rule 6 provides that a voluntary winding up shall be deemed to commence on the date of passing of resolution for voluntary winding up. Declaration of solvency Rule 7 provides that the majority of its designated partners, being not less than two, shall make a declaration in Form No. 2 verified by an affidavit to that effect that the LLP has no debt or that it will able to pay the .....

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y before the making of declaration duly attested by two designated partners. It is also to be accompanied by a report of the valuation of the assets of the LLP prepared by a valued, if there is assets in LLP. The LLP or its designated partners may repay any dues of the creditors or justify the claims of the creditors in any manner, before any declaration is made by designated partners. The declaration is to be delivered to the Registrar for registration in Form No. 3 within 15 days immediately p .....

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to the LLP or acceptance of offer made by the LLP within 30 days of the receipt of the declaration. Two thirds in value of the creditors are to given their consent as to that- The voluntary winding up is in the interest of all the partners and creditors; The LLP will not be able to pay for its debts in full from the proceeds of assets to be sold in winding up and propose that the LLP be wound up voluntarily by creditors, the LLP shall be termed as wound up voluntarily by creditors; or The LLP wi .....

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hat where the LLP has by resolution resolved for voluntary winding up and consent of creditors is received for voluntary winding up, the LLP shall within 14 days of the receipt of creditors consent, give notice of the resolution by advertisement in a newspaper circulating in the district where the registered office or the Principal Office of the LLP is situated. Appointment of LLP Liquidator Rule 10 provides for the appointment of liquidator. The liquidator may be appointed either by the partner .....

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oint another LLP liquidator with two thirds of the creditors in value of the LLP and fix the remuneration payable to the liquidator. If the LLP and the creditors appoint different liquidators, the LLP liquidator nominated by the creditors shall be LLP liquidator. If the creditors neither approve the liquidator nominated by the LLP nor nominate any other LLP liquidator, the LLP liquidator nominated by the partners of the LLP shall be LLP liquidator. If no LLP liquidator is nominated for whatsoeve .....

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or The LLP liquidator may be removed by the Tribunal as well as by the partners/creditors. Rule 10(5) provides that the Tribunal may, on cause being shown, remove an LLP liquidator and appoint any other LLP liquidator in his place. The Tribunal may also appoint or remove an LLP liquidator on an application made by the Registrar. The Tribunal shall give an opportunity of being heard to the LLP liquidator before being removed. An LLP liquidator may be removed by the partners of the LLP where his a .....

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a liquidator appointed by, or by the direction of the Tribunal), the LLP or the creditors may fill the vacancy in the manner specified for the appointment of LLP liquidator. Notice to Registrar by LLP Rule 12 provides that the LLP shall give notice to the Registrar of the appointment, or any vacancy occurred by death, resignation, removal or otherwise of, the LLP indicating the name and particulars of that LLP liquidator within 10 days of such appointment or change in Form No. 7. Cessation of p .....

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itors, as the case may be; The LLP liquidator shall settle the list of creditors or partners, which shall be prima facie evidence of the liability of the persons named to be creditors or partners; The LLP liquidator shall obtain the approval of partners or creditors for any purpose he may consider necessary; The LLP liquidator shall maintain regular and proper books of accounts in the form and manner specified and the partners or the creditors or any officer authorized by the Central government .....

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ts is not required to be audited where the value of total transactions during the period is for ₹ 50,000/- or less. Where the audit is not required the statements of accounts shall contain a declaration that the LLP liquidator acknowledges his responsibility for maintaining the books and records and funds are utilized only for the purpose of winding up of the affairs of the LLP. Committees Rule 16 provides that the partners or the creditors, as the case may be, may appoint such committee a .....

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t of the investigation, the Tribunal may pass such order and give such directions as it may consider necessary including the direction that such person shall attend before the Tribunal for the purpose of examination. If the fraud committed is by other than the persons of partners, the LLP liquidator may intimate the same to the partners or designated partners and include their views in their report. The Tribunal shall have power to transfer the winding up proceedings from voluntary winding up to .....

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of the partners or creditors of the LLP, as the case may be, on the said report and the final winding up accounts and explanation in the meeting of the partners and creditors. If the two thirds of the partners/creditors, after considering the report, accounts and explanations of the LLP liquidator, are satisfied that the LLP shall be wound up, they shall pass a resolution, within 30 days of the receipt of such report. If there is no sufficient number of partners/creditors the LLP liquidator may .....

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liquidator, that the process of winding up has been duly follows, the Tribunal may pass an order, within 60 days of the receipt of such application, that the LLP shall stand dissolved. The LLP liquidator shall file a copy of the order with the Registrar in Form No. 11. The Registrar, on receiving the copy of the order passed by the Tribunal shall forthwith publish a notice in the Official Gazette that the LLP stands dissolved. In the event affairs of the LLP are not fully wound up within a perio .....

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