There are two ways in which a LLP can be closed:-
I. LLP can be declared as Defunct:- If any LLP is not carrying out any business operations for one year or more, it can make an application to the Registrar in Form-24 and declare that the LLP is defunct and request to remove the name of the LLP from it's register of LLP's. Similarly, registrar also has the power to strike-off any defunct LLP after satisfying himself with a reasonable cause and need of striking-off. In this case, the Registrar needs to send a notice to the LLP and request for representation by the LLP within 1 month. Then the registrar needs to publish on its website for the general public, the notice or the content of the application made by the LLP for another 1 month. If no reply is received from anybody within the prescribed period, then the registrar may strike-off the name of the LLP.
II. Winding-up of LLP:- Winding-up is a process where all the assets of the business are disposed off to meet the liabilities, and surplus if any, is distributed among the existing partners of the LLP.
Winding-Up can be of Two types:-
a) Voluntary Winding-up: The partners may mutually decide among themselves to stop and wound-up the operations of the LLP under this method.
b) Compulsory Winding-up: A Limited Liability Partnership (LLP) may be compulsorily wound-up by the tribunal:-
i. If the LLP decides that it would be compulsorily wound-up by the Tribunal.
ii. If the number of partners in the LLP is reduced below 2 for the period more than 6 months.
iii. If the LLP is unable to clear it's debts.
iv. If the LLP has done some acts against the interests of sovereignty and integrity of India, the security of the state and the public order.
v. If the LLP has made defaults in filing annual returns or the statement of accounts and solvency with the registrar for a consecutive 5 financial years.
vi. If the tribunal decides that it is just and equitable for the LLP to be wound-up
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