Did You Receive Notice to Strike Off Your LLP?

“If you think compliance is expensive, try non-compliance.” – Paul McNulty.

The Registrar of Companies, Delhi and Haryana in its drive to clean the registry had issued the notice of striking off of 1171 LLP’s under Section 75 of LLP Act, 2008 read with Rule 37 of LLP Rules, 2009 vide public notice no. ROC-DELHI/LLP/SM/PHASE-II/2385. In the said public notice, the names of 1171 LLP’s are mentioned who had not file their Financial Statements (Form-8) and Annual Return (Form-11) for the financial year 2015-16 and 2016-17 or more and consequentially, the Registrar has reasonable cause to believe that they are not carrying on any business or operation for a period of two immediately preceding financial years.

CURRENT SCENARIO ABOUT LLP

Most of the people are not aware of what is limited liability partnership and they consider it at par with normal partnerships firms. They are not apprised as to there are some compliance that a LLP has to mandatorily do. It is a common wrong notion among people that LLPs are just required to file Income Tax returns and no other compliances are required to be done.

FORM 8 AND FORM 11

Form 8 (Statement of Accounts and Solvency) and Form 11 (Annual Return) are mandatorily required to be filed by every LLP within six months and sixty days from the end of financial year respectively. For instance, for the financial year 2017-18, the last date for filing Form 8 shall be 30^th October, 2018 and for filing Form 11 shall be 30^th May, 2018

Further, penalty for non filing of the same is Rs. 100 per day till the default continues.

It is also pertinent to note that there is no prescribed format for financial returns of the LLP and therefore they generally follow the format as given in Form 8.

CRUX SECTION 75 OF LLP ACT, 2008 READ WITH RULE 37 OF LLP RULES, 2009

In accordance with Section 75 of LLP Act, 2008, the Registrar has power to struck off the name of LLP from its register if it has reasonable cause to believe that a LLP is not carrying on business or its operation in accordance with the provisions of the Act after providing a reasonable opportunity of being heard.

Rule 37 of LLP Rules, 2009: Where the LLP has not carried on any business or operation for a period of two years, then the Registrar shall send a notice to LLP and all his partners of his intention of striking off the name of LLP and requesting them to send their representations within a period of one month.

Further, in case no representations has been made by the LLP or its partners then the name of the LLP shall be struck off and the liability, if any, of every designated partner shall continue as if the LLP had not been dissolved.

REMEDY AVAILABLE :

The remedy available to LLPs and designated partners can be further discussed into two parts:

1. If the partners want to continue with LLP

In this situation, the partners should file all the pending Form 8 and Form 11 along with a representation letter to the Registrar within one month from the date of issue of such notice. The Registrar may on due satisfaction not strike off the name of the LLP.

2. If the partners do not want to continue with the LLP

In this situation, the partners should file all the pending Form 8 and Form 11, representation letter and the requisite strike off forms with the Registrar along with the fees and penalty within one month from the date of issues of such notice. The Registrar may on due satisfaction strike off the name of the LLP from its Register.

{The author is a Company Secretary in Practice and can be reached at (M) 9999952595 and (E) cskajalgoyal@gmail.com}