Startup India Scheme: Eligibility Criteria, Benefits & Application Details

The ROC is a regulatory body under India's Ministry of Corporate Affairs (MCA) responsible for company registration, statutory record maintenance, and ensuring adherence to the Company Act and associated regulations. Non-compliance with ROC filings can result in:

• Fines and penalties
• Legal actions against the company and directors
• Damage to the company's credibility and reputation
• Difficulties in seeking funding or partnerships

On the other hand, timely compliance demonstrates a commitment to transparency and good governance, which can attract customers, partners, and investors. It also helps avoid heavy penalties and late fees that can strain a company's finances.

ROC Filing Due Date: Detailed Calendar

Here are the key ROC compliance forms and ROC filing due dates for the financial year 2025-2026:

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It's important to note that these ROC filing due dates are tentative and may be revised by the regulatory authority from time to time. Additionally, certain event-based compliances are also applicable in addition to these basic annual compliance obligations. It's crucial to keep track of the applicable due dates for each form to ensure timely compliance and avoid penalties.

Frequently Asked Questions

Eligibility

• New and existing Micro and Small Enterprises engaged in manufacturing, service, or retail activity, excluding Educational Institutions, Agriculture, Self Help Groups (SHGs), Training Institutions, etc.
• All service sector enterprises under the MSMED Act are eligible for coverage.
• Must be a “First-generation” entrepreneur.

Application procedure for Startups

• Go to https://www.cgtmse.in/Home.
• The homepage will open.
• Click on the “Register” option seen on the homepage.
• Enter your details and click on “Get OTP.”
• After typing in the OTP, the registration will be completed.
• “Login” to the page again. You will have to fill in the required information such as GST details, Bank Account details, and ITR.
• Click on “Submit” to avail the benefits under this scheme.
• Download the financial report, calculate the guarantee, etc, if needed.

Benefits of the Scheme

• The guarantee cover available under the scheme is to the extent of 75 percent of the sanctioned amount of the credit facility.
• Credit or loans in the northeast region, UT of J&K, and UT of Ladakh for credit facilities up to Rs 50 lakh, are covered by an 80 percent guarantee.
• For micro and small businesses operated or owned by women, as well as SC/ST individuals, the guarantee cover stands at 85%.
• For up to 5 lakh micro-enterprise loans, the guarantee cover stands at 85%.
• The credit is without any collateral or third-party guarantees.

The guarantee will commence from the e-date of payment of the guarantee fee. It will run for the agreed term credit tenure in the event of term loans / composite loans and for a period of 5 years in the case of working capital facilities only granted to borrowers or for such period as the Guarantee Trust may specify in this regard.

Frequently Asked Questions

Closure of LLP - Overview

The Limited Liability Partnership (LLP) closure process is a significant decision that can arise from various circumstances. Whether driven by voluntary factors, such as a mutual decision by the partners to discontinue operations, or involuntary factors, like non-compliance with statutory requirements, understanding the reasons and methods of closure is crucial.

The decision to close an LLP often stems from the following reasons:

1. Voluntary Closure:
   Partners may mutually agree to cease operations due to business inactivity, an unprofitable venture, or a strategic shift in focus. This proactive decision is usually taken when all stakeholders conclude that continuing operations no longer align with their goals.
2. Involuntary Closure:
   Sometimes, an LLP faces closure due to external circumstances such as non-compliance with legal or regulatory obligations, accumulation of penalties, or other statutory violations. In such cases, authorities may initiate the process of striking off the LLP from the official records.

Method or Procedure of Closing an LLP

Closing a Limited Liability Partnership (LLP) in India can be carried out through two primary methods: Voluntary Winding Up and Striking Off. Each method has its unique set of requirements, advantages, and limitations. Choosing the right approach depends on the LLP’s operational and financial status. Let’s look into the details of these two LLP closing procedures:

1. Voluntary Winding Up

Voluntary winding up is a process initiated by the partners when they collectively decide to dissolve the LLP. This method is typically chosen when the partners agree to cease operations due to inactivity, unprofitability, or a strategic decision to exit.

Advantages of Voluntary Winding Up:

• Controlled and Planned Process
• Avoids Penalties for Non-Compliance

Disadvantages of Voluntary Winding Up:

• Time-Consuming
• Settlement of Liabilities Required

2. Striking Off

Striking off is a simpler and faster method for closing an LLP. It is suitable for LLPs that have been inactive for a significant period and have no outstanding liabilities. This process involves applying to the RoC to remove the LLP’s name from the register.

Advantages of Striking Off:

• Simplified and Less Expensive
• Suitable for Dormant LLPs

Disadvantages of Striking Off:

• Not Applicable for LLPs with Liabilities
• Limited Scope for Active LLPs

Step-by-Step Procedure to Close an LLP

A brief overview of the process for closure of LLP in India:

1. Passing a Resolution for Winding Up

The first step is for the partners to pass a resolution for voluntary winding up. A majority of partners must agree, and the resolution must be filed with the ROC within 30 days.

2. Appointing a Liquidator

The partners must appoint a liquidator to oversee the winding-up process. The liquidator’s role includes realising the LLP’s assets and settling its liabilities.

3. Realising Assets and Paying Off Liabilities

The liquidator identifies and sells the LLP’s assets to clear all outstanding liabilities. Surplus funds, if any, are distributed among the partners.

4. Filing the Necessary Forms with the ROC

The LLP must file forms such as Form 24 and other requisite filings with the ROC to notify the authorities about the closure.

5. Obtaining the Final Order of Dissolution

After reviewing all filings and confirming the settlement of liabilities, the ROC issues a final order of dissolution, formally closing the LLP.

Filing LLP Form 24: Step-by-Step Process

Closing a Limited Liability Partnership (LLP) in India requires filing LLP Form 24 with the Ministry of Corporate Affairs (MCA). Below is a simplified step-by-step process to help you navigate this procedure:

1. Cease Business Operations

Before applying for closure, ensure that the LLP has either never commenced business or has stopped all commercial activities. If your LLP is still active, suspend all operations before proceeding.

2. Settle Liabilities and Close Bank Accounts

LLP Form 24 can only be filed if the LLP has no outstanding creditors and all bank accounts are closed. Obtain a closure letter from the bank as proof.

3. Draft Partner Affidavits

All designated partners must prepare an affidavit declaring:

• The LLP has ceased operations from a specific date or never started.
• The LLP has no liabilities, and partners agree to indemnify any future claims.

4. Prepare Supporting Documents

Attach the following documents to LLP Form 24:

• Copy of the latest Income Tax Return (if filed). If no returns were filed, this is not required for non-operational LLPs.
• A statement of accounts showing nil assets and liabilities, certified by a Chartered Accountant, dated no more than 30 days before filing.

5. Resolve Pending Filings

Ensure that:

• The LLP Agreement is filed, if not already done.
• Any overdue Form 8 and Form 11 are submitted up to the date of cessation of business.

6. File LLP Form 24 with MCA

Submit the completed LLP Form 24 with all attachments to the MCA. Once reviewed, a notice of striking off will be published on the MCA website if no objections are raised.

Documents Required to Close the LLP

Here is a list of LLP closure documents required during the process:

• Board Resolution for Winding Up: Document signed by all partners approving the winding-up process.
• Liquidator’s Consent: Written consent from the appointed liquidator.
• No-Objection Certificate from Creditors: If applicable, creditors must provide a no-objection certificate.
• Final Accounts and Balance Sheet: Statement of accounts showing all liabilities cleared.
• Tax Clearance Certificates: Certificate from the tax authorities confirming no pending dues.

 Conditions for LLP Closure

Certain conditions must be met before initiating the LLP closure process:

• Settlement of Debts and Liabilities: All outstanding debts and liabilities must be cleared.
• Statutory Filings: All statutory filings and compliance requirements must be up-to-date.
• Approvals: Necessary approvals from all partners and creditors (if applicable) must be obtained.

Advantages and Disadvantages of LLP

Like any business entity, an LLP has its own advantages and disadvantages that should be carefully considered before choosing this structure.

Advantages of an LLP

1. Limited Liability: The liability of partners is limited to their agreed contribution to the business, protecting personal assets in case of business debts or losses.
2. Separate Legal Entity: An LLP is a separate legal entity from its partners, meaning it can own assets, enter into contracts, and sue or be sued independently.
3. Flexibility in Management: There is no strict separation between ownership and management, allowing partners to manage the business as per their agreement.
4. No Minimum Capital Requirement: Unlike private limited companies, LLPs do not have a minimum capital requirement, making them more accessible to small businesses and startups.
5. Ease of Compliance: LLPs have fewer compliance requirements compared to companies, such as no mandatory board meetings or annual general meetings.
6. Unlimited Number of Partners: An LLP can have any number of partners, offering greater flexibility in expanding ownership.
7. Low Registration Cost: Setting up an LLP is more affordable than incorporating a private limited company.

Disadvantages of an LLP

1. Limited Recognition: LLPs are not as widely recognised as private limited companies, which may affect investor confidence or business collaborations.
2. Restrictions on Fundraising: LLPs cannot raise funds through equity, making them less suitable for businesses looking to attract venture capital or private equity investment.
3. Limited Scope for Public Trust: LLPs are not listed on stock exchanges, so they may lack the transparency that comes with publicly traded companies, leading to lower public trust.
4. Difficulty in Expansion: LLPs are not ideal for businesses aiming for rapid scalability, as the inability to issue shares limits their access to growth capital.

An LLP is an excellent choice for small businesses, professionals, and startups looking for a flexible, cost-effective business structure with limited liability. However, it may not be suitable for companies that require significant funding or aspire to scale rapidly. 

Frequently Asked Questions