LLP Strike Off (Closure)
LLP STRIKE OFF
FTE is very simple and cost saving method of Strike Off of the LLP without going for lengthy liquidation process and without High court intervention. The LLP can apply for the Striking off of its name under the provisions of the Limited Liability Partnership Act, 2008 and the rules made thereunder. The Registrar of Companies has a power to strike off the name of the LLP from the Register of Companies on suo-motto basis but a LLP can also file the application in the prescribed form to the ROC for removing the name of the LLP after extinguishing all its liabilities and after complying with some conditions.
The Registrar of Companies may remove the name of a LLP from the register of companies when the LLP is not carrying on any business or operation for a period of two years or more.
What are the Reasons to Strike Off of a LLP ?
1. No Compliance Burden:
Once the LLP is closed, there does not exist the LLP as such hence the promoters or directors get free from compliance responsibilities and possible dangers of non-compliances.
2. Faster route of Closure:
Inactive or non-functioning LLP can be closed swiftly in about 3 to 16 days, whereas traditional methods take longer and are more cumbersome procedures.
3. Avoid Fines:
If the inactive or non-functioning LLP is not following legal compliances, it may incur hefty fines and penalties and punishments for the officers of the LLP in certain cases including debarment of the Directors from starting another LLP. Hence, it is better to officially wind up a LLP that is inactive and avoid potential fines or liabilities in the future.
What are the conditions for the LLPs to go for Strike off ?
1.LLP should not have any debt unpaid.
2. LLP should have completed all the ROC filings till the date of making an application for strike off.
3. LLP should be inoperative at least for one entire financial year.
What is the procedure for strike off the LLP ?
Step 1: The LLP shall hold Partners Meeting for approval for striking of a name of the Company
Step 2: LLP shall obtain the Consent of all the partners for such strike off.
Step 3: If the LLP is regulated by any other authority than shall take approval from them.
Step 4: After taking approval the LLP shall file an application in LLP form 24.
Step 5: After receiving an application, ROC shall publish a public notice. Any objection to the proposed strike off shall be sent within 30 days.
Step 6: After prescribed time from the date of publication of notice in the Gazette notification of India, ROC shall strike off the name and the LLP shall stand dissolved.
Note: If the LLP has been struck off, the liability of all Designated Partners of the Limited Liability Partnership would continue and may be enforced as if the Limited Liability Partnership had never been dissolved.
What documents are required for LLP Strike Off ?
- Partners Resolution
- Consent Letters of all the Partners of the LLP
- Statement of Accounts certified by the Chartered Accountant
- CA Certificate
- Affidavit by each Partner
- Indemnity Bond of each Partner
- DSC token of the Designated Partner of the LLP for filing of forms
- PAN and Address proof of all the Partners who are giving the affidavit.
How we help with Strike Off of a LLP
LLP Review: We will review the activities of the LLP and determines if it is eligible for Strike Off under the FTE Scheme under the Companies Act, 2013 thereby following easier procedure. The review process would be completed in 2 - 3 working days.
Document Preparation: Then we will provide timelines; documents for Strike Off of the LLP it will take 5 - 7 working days depending on the LLP.
Strike off Application: Application for closure of LLP will be made to the ROC who will usually approve the application for Strike Off and closing of the LLP in about 3 months.