Affidavit of Designated Partners to Wind up an LLP

Affidavit of Designated Partners for LLP Closure in India

The Affidavit of Designated Partners is a crucial, sworn statement required during the voluntary winding up of a Limited Liability Partnership (LLP) in India. This document, executed on a non-judicial stamp paper of the requisite value as per state regulations, is submitted to the Registrar of Companies (RoC) as part of the formal closure process. It serves as a legal declaration by the designated partners, affirming the truthfulness of the information provided regarding the LLP's dissolution and its financial and legal standing.

What is an Affidavit of Designated Partners for LLP Winding Up?

This affidavit is a notarized document where the designated partners of an LLP formally declare, under oath, their unanimous decision to voluntarily dissolve the partnership. It confirms that the LLP has ceased all business operations and has either no outstanding liabilities or has settled all debts and obligations. The primary purpose is to provide the RoC with a legally binding assurance that the winding up is being conducted properly and that there are no hidden disputes or claims that could later challenge the closure.

Key Information Required for the Affidavit

To ensure its validity and acceptance, the affidavit must include specific essential details:

• Full Name and Registered Office Address of the LLP: As per the Certificate of Incorporation.
• LLP Identification Number (LLPIN): The unique corporate identity number.
• Full Names, Addresses, and Designated Partner Identification Numbers (DPINs): Of all designated partners making the declaration.
• Sworn Statement of Cessation of Business: A clear declaration that the LLP has stopped all commercial activity from a specified date.
• Declaration of No Liabilities or Settlement of All Liabilities: A critical clause stating that the LLP has no outstanding debts, or that all dues to creditors, banks, and other entities have been fully paid.
• Declaration of No Legal Proceedings: An affirmation that the LLP is not involved in any pending litigation.
• Consent of All Partners: A statement confirming that all partners have agreed to the voluntary winding up.
• Request for Strike-off: A formal request to the Registrar to strike the name of the LLP off the register.

How to Fill Out the Affidavit Template

Using a template simplifies the process. Here is a step-by-step guide:

1. Obtain the Correct Stamp Paper: Purchase non-judicial stamp paper of the value mandated by your state for affidavits.
2. Enter Jurisdictional Details: Begin with "I/We, the undersigned..." followed by your full name(s), father's name(s), age(s), and residential address(es).
3. Identify the LLP: Clearly state the name of the LLP, its LLPIN, and its registered office address.
4. Draft the Sworn Statements: Carefully articulate each declaration point mentioned in the 'Key Information' section. Be precise and truthful.
5. Schedule of Attachments: List all documents being attached, such as consent letters from all partners and financial statements proving nil assets/liabilities.
6. Notarization: All designated partners must sign the affidavit in the presence of a Notary Public or an Oath Commissioner, who will then affix their seal and signature.

Common Clauses and Scenarios Covered

A well-drafted affidavit addresses several standard legal scenarios:

• Clause on Settlement of Dues: This clause demonstrates responsible action by the partners regarding outstanding obligations.
• Clause on Pending Litigation: By declaring no ongoing cases, the partners assure the RoC that the closure will not interfere with the judicial process.
• Indemnity Clause: Partners may agree to indemnify each other and the LLP against any future, unforeseen claims, often detailed in a separate indemnity bond referenced in the affidavit.
• Scenario of Dormant LLPs: For LLPs that never commenced business or were inactive, the affidavit focuses on the absence of transactions.

The Role of Designated Partners in LLP Closure

Designated partners hold significant responsibility during an LLP's winding up. They are legally accountable for ensuring compliance with the LLP Act and rules. Their role includes facilitating partner consensus for voluntary dissolution, ensuring all statutory dues are cleared, and executing this affidavit. Their signatures on the affidavit legally bind them to the veracity of the statements made, making them accountable for the closure process.

Legal Requirements for Winding Up an LLP in India

The voluntary winding up process is governed by the Limited Liability Partnership Act, 2008, and its rules. The affidavit is a key document. Broader requirements include:

• Passing a special resolution for voluntary winding up by a majority of partners.
• Settling all liabilities and obligations of the LLP.
• Filing Form 1 (Application for Strike Off) with the RoC, accompanied by the affidavit and consent letters.
• Publishing a notice of the proposed strike-off in a newspaper for public awareness.

Consequences of Non-Compliance

Submitting an incomplete or incorrect affidavit, or failing to submit it, can lead to rejection of the strike-off application. This may result in the LLP continuing to incur annual compliance costs. If liabilities surface after an LLP is struck off based on a false affidavit, the designated partners can be held personally liable for those debts. Providing false information in a sworn affidavit can also attract penalties.

Frequently Asked Questions about the Affidavit and LLP Winding Up

Can an LLP company be a designated partner?

Yes, a body corporate can be appointed as a designated partner, provided it has a nominated individual acting on its behalf. However, at least one individual must always be a designated partner.

How do I change the designated partner in an LLP?

A change is effected by filing Form 4 (Notice of appointment, cessation, change in name/address/designation of a partner/designated partner) with the RoC. This must be done before proceeding with winding-up formalities if such a change is recent.

What is the format of a resignation letter for a designated partner in an LLP?

While there is no strict statutory format, a resignation letter should be a formal communication to other designated partners, stating the intent to resign, the effective date, and a declaration of fulfilled obligations. This resignation must be reported to the RoC via Form 4.

What documents are needed to close an LLP?

Key documents include: the Affidavit of Designated Partners (on stamp paper), indemnity bonds from partners, consent letters from all partners, a statement of accounts showing nil assets and liabilities, copies of latest income tax returns, and the duly filled Form 1 for strike-off.

What is the process for winding up an LLP in India?

The standard voluntary process involves: 1) Partner consensus on dissolution, 2) Settling all debts and legal issues, 3) Preparing the affidavit and other closure documents, 4) Filing Form 1 with the RoC along with attachments, and 5) Upon approval, the RoC strikes the LLP's name from the register.

What is the difference between closure and strike-off of an LLP?

'Closure' is the general term for ending an LLP's existence. 'Strike-off' is the specific administrative procedure where the RoC removes the LLP's name from the official register, effectively dissolving it. The affidavit is a key document for initiating the strike-off process for voluntary closure.

Is it mandatory to have a designated partner in LLP?

Yes, every LLP must have at least two designated partners who are individuals, with at least one of them being a resident in India. They are responsible for legal and regulatory compliances.

How do I remove a designated partner from LLP?

Removal typically follows the procedure outlined in the LLP Agreement. It requires a formal resolution by the partners, after which Form 4 must be filed with the RoC to officially record the cessation of the designated partner.

Our guided template helps you create a precise and legally sound Affidavit of Designated Partners, ensuring you provide all necessary information correctly. This streamlines your LLP winding-up process, helps avoid rejection by the Registrar, and provides you with immediate PDF and Word drafts for notarization and filing.