How to Strike Off LLP & Its Rules and Procedure

A business is started through LLP i.e., a Limited Liability Partnership with big goals and hope.  But sometimes the LLP is not able to achieve its objectives due to wrong decisions related to business, adverse circumstances, and the untimely death of an important partner.  Along with the registration of LLP, it also must file many returns from time to time. 

Heavy fines must be paid if these returns are not filed on time.  In such adverse circumstances, the winding up of the LLP becomes necessary to avoid increasing the financial burden on the partners of the LLP.  A prescribed procedure is to be followed for the winding up of LLP. 

In this article, we will learn about the various dimensions of strike-off LLP.

 Table of content-

 1. What is LLP?

 2. What is meant by LLP Strike Off?

 3. What are the most important conditions for striking off LLP?

 4. In what ways can LLP strike off?

5. How long does it take for an LLP to strike off?

 6. What is the procedure to strike off an LLP?

 7. What is required to fill Form 24 for Strike off LLP?

8. What are the documents to be attached while filling Form 24 for Strike off LLP?

 9. How LLP is wound up after filling Form 24?

 10. Conclusion

1. What is LLP?

There are many ways in which companies are registered in the country.  One of these flexible and easy ways is a Limited Liability Partnership (LLP).  In the arrangement of an LLP, two or more partners enter into a special agreement and have limited responsibilities.  It is registered and administered as per the compliance and rules of the Ministry of Corporate Affairs (MCA).  LLP is a separate legal entity.  It is a flexible agreement with low compliance requirements.  There is no distinction between owner and manager. 

The advantage of the best LLP is that it can be easily wound up when adverse circumstances arise. Despite a change of partners, the LLP continues to operate. It can enter into agreements and own assets in its name. LLP is a distinct legal entity, yet it is nevertheless accountable for all its assets. However, the partners’ responsibility is only as much as their agreed-upon contribution to the LLP.

2. What is meant by LLP Strike Off?

If the LLP wishes to discontinue its business for any reason or where it has not been conducting any business for a period of one year or more, it may apply to the Registrar of Companies to declare itself inactive and remove the name of the LLP.  Can do.  This is what is called the strike-off of LLP.

3. What are the most important conditions for a strike-off of LLP?

The essential condition of the Strike-off of LLP is that the LLP is inactive or has been inactive for a period of at least one year from the date of incorporation.  Another important condition is that the LLP does not have any assets/liabilities as of the date of application.  Also, the current account of the LLP has been closed.

The consent of the partners of the LLP has been obtained.

4. In what ways can a strike-off LLP take place?

According to the Limited Liability Partnership Rules 2009 Rule 37(1), the Registrar of Companies has the power to dissolve any company.  Secondly, any LLP can voluntarily apply to the Registrar of Companies for the removal of its name from the register.  Normally in the first case, the Registrar of Companies observes whether an LLP has not been carrying on any business for a period of two years or more, and a notice will be issued by the Registrar to all the partners of that LLP.  The reply to this notice is to be sent to the concerned LLP within one month from the date of the notice.

5. How long does it take for an LLP to strike off?

It normally takes three months for an LLP to strike off.  But the process of strike-off is very complicated.  That is why sometimes this process takes a long time.  However, a company will cease to exist no less than 3 months after the winding up notice is advertised in the Gazette.

6. What is the procedure to strike off an LLP?

- To strike off an LLP, first, a general meeting of the LLP must be held.

- Form 24 is to be filled for LLP strike-off, for which consent of all the partners is mandatory.

- Ensuring due disposal of all assets and liabilities of the LLP.

- All the bank accounts of the LLP must be closed, and the bank account closure report has to be obtained from the concerned bank.

- The application must be made in Form 24 with the Registrar of Companies.

- After applying to the Registrar of Companies, a stipulated period has passed and due compliance with all procedures is confirmed by the Registrar of Companies.

After this notice is issued by the Registrar of Companies through notification and the LLP is struck off.

7. What are the facts required to fill Form 24 for Strike off LLP?

• Approval of strike off
• Consent of all the partners
• Close all its bank accounts
• No liabilities/creditors shall exist
• File overdue returns

8. What paperwork must be included with Form 24 for LLP Strike Off?

- A statement of account with zero assets and zero liabilities, certified by a chartered accountant in practice, made no sooner than 30 days after the date form 24 was filed.

- The agreement of all LLP partners.

- An affidavit that is jointly or severally signed by the specified partners.

- A copy of the initial LLP agreement, along with any amendments, if one was entered but not filed,

When the LLP was incorporated but has yet to open for business

- A certificate from the relevant bank branch attesting to the closing of an account.

-The power to submit an application that is properly signed by each partner.

-In cases where the LLP was governed by special legislation, the application for removal of its regulation must be accompanied by the regulatory body's permission, which was created or established by that law.

9. How LLP is wound up after filling Form 24?

The documents attached with the application are placed on the website of the Ministry of Corporate Affairs for one month by the Registrar of Companies after the LLP has filed Form 24.  All necessary facts are confirmed by the Registrar of Companies.  The Registrar must verify that the LLP does not have any assets or liabilities.  Then the name of the LLP is removed from the register of companies by the Registrar of Companies and necessary information is published in the Official Gazette.  In this way, the LLP gets dissolved.

10. Conclusion:

Uncertainty is an inevitable fact in business.  In adverse circumstances sometimes LLP formed for a larger purpose is not able to fulfill its objectives.  In such a situation, if it is not terminated, the financial burden on the partners increases due to penalties, etc.  In such a situation, while the easy winding up of LLP is better for businessmen, it also forms the basis for creating other businesses.