What Is LLP and OPC Closure? A Complete Guide

LLP and OPC closure both involve removing the entity's name from the ROC register, but the governing laws and procedures differ. An LLP is governed by the Limited Liability Partnership Act, 2008, while an OPC is governed by the Companies Act, 2013. The closure process for an OPC requires a board resolution and a special resolution from the sole member, whereas an LLP requires consent from all partners.

For an LLP, closure can be done through Form 24 (statement of accounts and solvency) followed by Form 25 (application for striking off). For an OPC, the process involves filing Form MSC-1 (application for striking off) and Form STK-2 (final closure). The timeline for both is typically 3-6 months if no objections are raised by the ROC. Both entities must have no assets, liabilities, or pending legal proceedings at the time of closure.

The MCA has set specific conditions that must be met before applying for closure. For an LLP, the entity must not have commenced business within 18 months of incorporation, or must have ceased operations for at least one year. It must have no assets or liabilities, no pending tax dues, and no outstanding loans or advances. All partners must consent to the closure.

For an OPC, the company must not have commenced business within 12 months of incorporation, or must have been inactive for at least one year. It must have no assets or liabilities, no pending legal proceedings, and no outstanding statutory dues including income tax, GST, or professional tax. The sole director must provide a declaration of solvency. Both entities must have filed all annual returns and financial statements up to the date of closure.

The document checklist varies slightly between the two entity types. For an LLP closure, you need: Form 24 (statement of accounts and solvency), Form 25 (application for striking off), consent of all partners, indemnity bond from partners, affidavit from partners, and a statement of accounts showing nil assets and liabilities. For an OPC closure, you need: Form MSC-1 (application), Form STK-2 (final closure), board resolution, special resolution from the sole member, indemnity bond from the director, affidavit from the director, and a statement of affairs.

Both applications require digital signatures of the authorized signatories. The documents must be notarized or attested by a practising professional such as a Chartered Accountant or Company Secretary. The ROC may request additional documents if the application is incomplete or if there are discrepancies in the records.

The procedure follows a structured timeline. For an LLP: Step 1 — Hold a meeting of all partners and obtain written consent for closure. Step 2 — File Form 24 with the ROC, attaching the statement of accounts and solvency declaration. Step 3 — After 30 days, file Form 25 for striking off the name. Step 4 — The ROC issues a notice in the Official Gazette and invites objections. Step 5 — If no objections are received within 30 days, the ROC issues a certificate of dissolution.

For an OPC: Step 1 — Pass a board resolution recommending closure. Step 2 — Pass a special resolution by the sole member approving closure. Step 3 — File Form MSC-1 with the ROC along with the statement of affairs. Step 4 — The ROC issues a public notice and invites objections. Step 5 — After 45 days, file Form STK-2 for final closure. Step 6 — The ROC issues a certificate of dissolution. The entire process typically takes 3-6 months from the date of application.

The ROC may reject a closure application for several reasons. The most common are: pending statutory filings such as annual returns or financial statements, outstanding tax dues or penalties, pending legal proceedings against the entity, existence of assets or liabilities not disclosed in the application, or incomplete documentation. For LLPs, the ROC may reject if all partners have not consented. For OPCs, rejection can occur if the sole director has not provided a proper declaration.

Another frequent issue is the entity having active GST registration or other business licenses that need to be cancelled before closure. The ROC also checks for any pending complaints or investigations. If the application is rejected, the entity must rectify the issues and file a fresh application. In some cases, the ROC may require the entity to go through the regular winding-up process instead of the simplified strike-off procedure.

If your LLP or OPC has no assets, liabilities, or pending dues, you can proceed with the voluntary closure process by engaging a qualified Company Secretary or Chartered Accountant. They will prepare the necessary documents, file the forms on the MCA portal, and handle any queries from the ROC. Do not attempt to file the closure application without professional assistance, as errors can lead to rejection and delays.

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This page provides preliminary information. It is not legal advice. For your matter, consult a qualified professional.