The strike off of a Limited Liability Partnership (LLP) is a legal mechanism through which an LLP that is not carrying on business can get its name removed from the Register of LLPs. This process is governed by Section 75 of the LLP Act, 2008 read with Rule 37 of the LLP Rules, 2009.
Strike off is generally opted for when the LLP has ceased operations and the partners do not wish to continue with statutory compliance.
1. Legal Provisions
- Section 75 empowers the Registrar to strike off
- Rule 37 prescribes the procedure via Form 24
- Application to be filed in Form 24 with the Registrar of Companies (ROC)
2. Eligibility Conditions for LLP Strike Off
An LLP can apply for strike off if:
1. It has not carried on any business since incorporation
OR
2. It has ceased to carry on business for a continuous period of at least 1 year
Additional conditions:
- No pending business activities
- No outstanding liabilities
- No pending litigation or prosecution
- All statutory filings completed up to date
3. Pre-Conditions Before Filing Form 24
(A) Closure of Bank Account
- All bank accounts of the LLP must be closed
- Bank closure certificate / proof must be obtained
(B) Filing of Pending Returns
- Form 8 – Statement of Account & Solvency (up to date)
- Form 11 – Annual Return (up to date)
- Income Tax Return – Filed (even NIL return, if PAN exists)
(C) Nil Liabilities
- LLP must not have any secured or unsecured liabilities
4. Documents Required for LLP Strike Off
The following documents are required to be attached with Form 24:
1. Statement of Account showing Nil assets and liabilities, not older than 30 days, certified by a Practicing Chartered Accountant
2. Affidavit from all partners
3. Indemnity Bond from all partners
4. Copy of Income Tax Return acknowledgement (if applicable)
5. Copy of LLP Agreement along with all supplementary agreements, if any
6. Proof of closure of bank account
7. Resolution passed by partners approving strike off
8. Consent letters from all partners for filing strike off application
5. Procedure for LLP Strike Off
Step 1: Pass Resolution of Partners
Obtain consent of all partners approving strike off.
Step 2: Close Bank Account
Ensure no transactions or balances remain.
Step 3: Prepare Documents
Prepare affidavit, indemnity bond, and statement of account.
Step 4: File Form 24
- Login to MCA Portal
- Upload Form 24
- Attach all required documents
- Pay prescribed government fees
Step 5: Examination by ROC
ROC examines the application and may seek clarification or additional documents.
Step 6: Publication of Notice
If satisfied, ROC publishes a notice on the MCA website inviting objections.
Step 7: Strike Off Order
After expiry of the notice period, ROC removes the LLP’s name and publishes the strike off notice in the Official Gazette.
6. Government Fees
- Form 24 filing fee – ₹500 (as prescribed, subject to MCA amendments)
7. Effect of Strike Off
- LLP stands dissolved
- Certificate of Incorporation is cancelled
- Partners remain personally liable for any undisclosed or future-discovered liabilities
8. Important Practical Points
- LLP cannot apply for strike off if any prosecution is pending
- DIN of partners remains active
- Strike off does not extinguish undisclosed liabilities
- Partners are personally liable if liabilities surface later
9. Suo Moto Strike Off by ROC
ROC may initiate strike off if:
- LLP fails to file Form 8 and Form 11 for consecutive financial years
- LLP appears to be non-operational
ROC issues a show cause notice and provides an opportunity of being heard before striking off.
Conclusion
LLP strike off is a cost-effective and simplified exit route for inactive LLPs. However, strict compliance with statutory filings, proper documentation, and professional certification are essential to ensure smooth processing and to safeguard partners from future liability exposure.
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