Introduction
The Limited Liability Partnership “LLP” is an alternative corporate business structure that combines the advantages of limited liability and flexibility. The LLP can continue to operate despite changes in partner status. The LLP is a separate legal entity that is liable for all of its assets, but the partners' liability is only limited to the amount of their agreed-upon investment in the LLP. In addition, no partner is liable for the independent or unauthorised actions of any other partners, protecting individual partners from joint liability caused by another partner's bad business decisions or misconduct.
Since an LLP is a legal entity, the Registrar must approve closure just as it was with its incorporation.
Pursuant to rule 37 of Limited Liability Partnership Rules, 2009 and Section 75 of The Limited Liability Partnership Act 2008 governs the provision of striking off of LLP.
However, LLP can also be closed through winding up and dissolution which could be either voluntary or compulsory by Tribunal.
Voluntary Strike off
The LLP may submit an application to the Registrar for the declaration of the LLP as defunct and the removal of the LLP's name from its register of LLP's if it wishes to shut down its business or if it has not conducted any commercial operations for a period of one year or longer.
Reasons for strike off
· The LLP is no longer active or conducting business.
· The goals for which the LLP was formed have been achieved.
· The parent firm of the group of which the LLP is a member has chosen to dissolve the LLP.
· The LLP is having financial problems, making it impossible for the partners to run the company.
· To pursue other interests, the partners have made this decision.
Mandatory Strike off
Registrar also has the power to strike off any defunct LLP after satisfying himself of the need to strike off and has reasonable cause.
Condition of Strike off
Voluntary: An LLP can apply to Registar with the consent of all partners for striking off its name from the register if it is not carrying on any business or operation for a period of one year or more.
Process for Voluntary Strike off of LLP
1. Passing of unanimous resolution by all the partner for striking off LLP
2. Prepare statement of solvency
3. Obtain consent of all creditors
4. If LLP is registered under any other authority, obtain NOC from such authority
5. File Form 24 for making application of strike off
Documents required
|
S. No. |
Documents |
|
1 |
Consent of all partners |
|
2 |
Consent of all creditors |
|
3 |
LLP agreement and modified agreements if any |
|
4 |
Statement of company accounts |
|
5 |
Declaration and affidavits |
|
6 |
Copy of authority to make the application duly signed by all partners |
|
7 |
Copy of acknowledgment of latest Income-tax return |
|
8 |
Form 8 - Statement of Account Solvency and Charges |
|
9 |
Form 11 - Annual Return of LLP |
|
10 |
Copy of order / NoC of the concerned regulatory authority |
What is included in this
- Documents preparations for strike off
- Filing of application at Registrar
- Liasioning with ROC
- 24*7 Mail Support;
FAQ’s
1. What is strike off of LLP?
Strike off of LLP is the process of removing a Limited Liability Partnership (LLP) from the register of LLPs maintained by the Registrar of Companies (ROC). It can be done either voluntary or mandatory.
2. What is LLP Agreement?
An LLP agreement is an agreement between two or more people who have decided to operate a business jointly. The agreement outlines the guidelines for operating the firm, including how revenues and losses will be allocated, how decisions will be made, and how disagreements will be settled.
3. What is statement of solvency?
The partners submit a declaration of solvency stating that the LLP has no debts or if there are debts, then they will be able to pay all of its debts within one year of the date of dissolution.
4. How many days are required to complete strike off of LLP
Depending on the conditions, the procedure to strike off an LLP can take anywhere from 20 to 30 working days. Some of the elements that could affect how long it takes to terminate an LLP include the following:
· the period required to complete the application by the Registrar of Companies.
· Whether or not the LLP has any unpaid liabilities or debts.
· Whether or not creditors or other interested parties have any objections to the strike off.
5. Which form is required to file for application of strike off?
E form 24 is required to file application to ROC for strike off of LLP
6. What is mandatory strike off of LLP?
ROC has power to issue notice under section 75 of LLP Act 2008 read with Rule 37 of LLP Rules, 2009 informing that unless a cause to the contrary is shown within specified time period, name of LLP shall be struck off from the Registers of ROC.