There are clear benefits to winding up an LLP, the leading ones being that it's quick and easy and it doesn't cost a lot, but it's not always possible to do it.
Dissolving a limited liability partnership is more advantageous than having it liquidated, which is a process that involves various fees as well as legal costs that can be extraordinarily high. It's simply a matter of removing the LLP from the register at Companies House, provided there are no objections and all the rules are followed.
You'll be able to wind up your LLP quickly and easily if in the past three months it has not been trading or has not changed its name; has not made a disposal for the value of its property or rights; and is currently not involved in legal proceedings nor will be at any point in the future.
Also, if you're planning to dissolve an LLP, you must discuss the matter with everyone in it to ensure that they are aware of the plan and are in relative agreement with it. Parties who object to the LLP's winding up may have their objections upheld by Companies House and if so the process of LLP dissolution will be suspended.
Coddan offers its LLP dissolution service starting from the all-inclusive price of just £200.00, and the relevant form can be filled out online at our website. It makes the entire process fast and painless.
In terms of disadvantages of seeking to have an LLP dissolved, there is always the danger that if the company is in financial difficulty, creditors might oppose the application to Companies House for fear they might not get paid. Creditors are among the parties that must be in agreement with the winding up, and in many cases where an indebted LLP wants to dissolve, they will reject the application.
Under the law, creditors, shareholders or any other party that is against an LLP's dissolution can apply to Companies House for the LLP to be revived for up to 20 years. A revival can also occur if all parties were not adequately informed of the initial dissolution or if misleading or false information was given at the time of the application, such as the LLP was actually trading in the three months leading up to the submission.
Additionally, fraud or other wrongdoing by the LLP during the winding up process can lead to a revival.
Other disadvantages of dissolving an LLP are that under the Insolvency Act it is not an actual winding up of the company and subsequent insolvency proceedings can be launched. A court might well order that an LLP that has been dissolved be restored for the purposes of the proceedings.