FAQs on LLP Strike off in India

Q1) What is an Limited Liability Partnership (LLP)?

Ans : A Limited Liability Partnership (LLP) is a type of partnership in which some or all of the members have limited liability. LLP is a type of alternative corporate business structure that combines the benefits of a company's limited liability with the flexibility of a partnership.

Q2) When do I need to close my LLP?

Ans. An LLP must be closed if one of the following conditions is met: 

• The LLP has been inactive for at least one year from the date of incorporation or
• LLP has no assets or liabilities as of the date of application

Q3) How can I close my LLP?/What are the major steps to close an LLP?

Ans. You can close your LLP by filing Form 24 by following the steps outlined below:

Step 1: Cease all commercial activity

Step 2: Close all your bank account(s)

Step 3: Prepare your affidavits and declarations

Step 4: Gather Documents

Step 5: Submit Any Outstanding Documents

Step 6: Obtain the Chartered Accountant Certificate

Step 7: Submit the LLP Form 24.

Q4) What is strike-off (rules) procedure for LLP?

Ans. If the LLP wishes to close or is not carrying on any business operations for a period of 1 year or more, it may apply to the Registrar of Companies (ROC)to declare the LLP defunct and remove the LLP's name from its register of LLPs. With the approval of all partners, the registrar or the LLP can strike off the name of the LLP in e-Form 24.

After receiving the application, the registrar would notify the Limited Liability Partnership and all of its partners of his intention to remove the LLP's name from the register and request that they send their representations, along with copies of any relevant documents, within 30 days of the date of the notice.

If there are no adverse representations from LLP partners or the general public after the time specified in the notice, the registrar may, if satisfied, strike off the LLP name from the register and publish a notice in the official gazette.

Q5) What are the ways to strike off the LLP?

Ans. An LLP can close its doors in either of the two ways listed below:

Declaring LLP as Non-functioning: When an LLP ha s not carried on business for one or more years or wishes to close its doors, it can apply to the registrar to have the LLP declared defunct and its name removed.

Winding Up:

a) Voluntary Winding Up: When a group of partners chooses to close the company.

b) Compulsory Winding Up: The tribunal may order the LLP to be wound up if it fails to comply with certain conditions.

Q6) What are the documents required for strike off of LLP?

Ans. Copy of all partners' consent (Mandatory)
Copy of all creditors' consent (Mandatory)
Copy of the undertaking/indemnity bond for name removal (Mandatory)
Copy of asset and liability statement duly certified as true and correct by auditor/chartered accountant in practise (Mandatory)
Copy of latest income tax return acknowledgement (Mandatory)

An affidavit sworn by the chosen partners, either collectively or individually, stating:

1. That the Limited Liability Partnership has not begun business, or that if it has begun business, it has stopped to engage on such business as of.......(dd/mm/yyyy);

2. That the limited liability partnership has no liabilities and will indemnify any liability that may arise even after striking off its name from the Register; 

3. That the Limited Liability Partnership has not opened any bank accounts and, if any, that the said bank accounts have since been closed, along with certificate(s) or statement from the respective bank demonstrating closure of Bank Account; 4. That the Limited Liability Partnership has not filed any Income Tax Returns.

Q7) Which companies will not be qualified for provisions of strike off LLP?

Ans. The following companies do not qualify for the provision of strike off:

• Companies that have been listed for inspection or investigation - if such instruction is being carried out/pending/completed but prosecutions related to such inspection or investigation are pending in a Court of law
• Listed companies
• Companies are delisted for failing to comply with listing regulations, listing agreements, or other statutory laws.
• Vanishing companies
• Companies that have yet to reply to notices of certain provisions.
• Companies that have not provided follow-up instructions on any report required by Section 208 of the Act.
• If prosecutions under the preceding two sections are pending in a court of law.
• Companies where a criminal prosecution is pending in a court of law.
• Companies whose application to the competent authority for compounding the offenses committed by it or any of its officers in default is pending.
• Companies that take any outstanding public deposits.
• Companies that have outstanding charges that must be paid.
• Companies registered under Section 25 or Section 8 of the Companies Act, 1956.

Q8) What will the consequences be if the resubmission sent by the department is not filled?

If the department raises a resubmission and it is not completed within the time limit, the application will be rejected automatically, and the partners will have to restart the process and file a new form.

Q9) How long will it take to cancel the LLP?

It usually takes 6 months to a year to remove the LLP's name from the registrar's records.

Q10) What is the function of E-Form 24?

Ans. E-Form 24 is used to apply to the Registrar of Companies to have the name of the LLP struck out.

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