As the name ‘winding up’ means putting an end to any business being conducted by an entity. Also, winding up of Limited Liability Partnerships (LLPs) states that entity has been put to an end and no more liable to function. The assets of LLP have been sold off and the proceeds realized from those are to be utilized for paying off the creditors and other liabilities. Tax mantra has come up with the process of Voluntary winding up of the LLPs. LLPs can be voluntarily being wound up either by the members or by the creditors of the concern. Following are the 8 steps for voluntary winding up of LLPs –

1. Passing of resolution
2. Declaration of solvency
3. Creditors consent
4. Publication of resolution
5. Appointment of liquidator
6. Audit of LLPs liquidator A/c
7. Liquidator’s Report
8. Dissolution of LLPs

Passing Of Resolution – A resolution is required to be passed with 3/4^th majority of members for wounding up of LLP. A copy of resolution is required to be filed with ROC within 30 days of passing the resolution in Form 1. Declaration Of Solvency – The Designated Partners are required to make a declaration in Form 2 verified by an affidavit that the LLP has no debt or the debts shall be paid off within such period not exceeding 1 year from its commencement. The declaration is to be registered with the Registrar in Form 3 within 15 days of passing the resolution along with –

• Valuation Report valuing the assets
• Statement of assets & liabilities

Creditors Consent – If creditors are subsisting, approval of such creditors are also required for winding up. A copy of declaration, amount due to creditors and an offer for the creditors to accept such amount shall be given to the creditors by registered or speed post. The creditors shall within 30 days from the date of receipt of such declaration give their consent to LLP. At least 2/3rd in value of the creditors of the LLP shall give their consent for such voluntary winding up. In case if the debts of the creditors would not be payable from the proceeds of the assets of the LLPs, the LLPs may be wound up voluntarily by creditors. Publication Of Resolution – After the consent has been received from creditors, an advertisement is required to be made in a newspaper circulating in the district within 14 days of receipt of such intimation. Appointment Of Liquidator – A liquidator is required to be appointed by the LLP within 30days of receipt of creditors consent. The liquidator is to be appointed with the consent of other partners. A declaration shall be filed in Form 6 by the liquidator disclosing his conflict of interest in respect of his appointment with the LLPs or the creditors, if any. A notice shall also be given to the Registrar in Form 10 within 10 days of appointment of such Liquidator by the LLPs. As the Liquidators will be appointed, all powers & rights of Designated Partners & other Partners shall come to an end. Audit Of LLPs Liquidator’s Accounts – An audit is required to be conducted in respect of the accounts of liquidators so appointed by the LLPs. Liquidators Report – A report shall be prepared by the Liquidator in Form 9 explaining the manner in which dissolution took place and how the assets & liabilities are being disposed off. Consent of at least 2/3^rd of the total no. of partners is also required in the report being prepared & accounts satisfied by liquidator. The resolution for such approval shall be passed within 30 days of the receipt of the report, winding up of accounts and explanation for its dissolution. Dissolution Of LLPs – Within 15 days of the of the passing of the above resolution , the Liquidator of LLPs, shall file with the Registrar a copy of the final winding up of accounts, explanations and report in Form 10 and file an application with the Tribunal, for passing an order of dissolution of LLPs. The Tribunal on being satisfied that all legal formalities have been complied with shall pass an order for the dissolution of LLPs within 60 days of the receipt of such application. Within 30 days a final copy of the order for the dissolution of LLPs shall be filed by the liquidator with the Registrar in Form 11.