Strike off the name of LLP Voluntarily along with formats

An LLP is required to file certain mandatory returns whether it does the business or not. Non-filing of due returns will attract penalties and prosecution under the LLP Act and the Designated Partners are liable to face the same action. The penalty for LLPs defaulting in filing of any statutory return is Rs.100 per day, without any maximum limit. Cessation of operation cannot be a reason for non-filing of returns. An LLP continues to exist until its formal closure. An LLP being a separate legal entity registered under law, it is mandatory to be closed as stipulated under the LLP Act.

Chapter XIV of The Limited Liability Partnership Rules, 2009 (LLP Rules) prescribe procedure for “striking off name of defunct LLP” subject to the conditions and restriction therein. Pursuant to Rule 37(1) of LLP Rules, an LLP fulfilling the following conditions can file an application for striking off its name from the Register of LLP.

• LLP should be inoperative from the date of incorporation OR inactive for a period of at least one year;
• LLP should not have any assets / liabilities as on date of application.

If any LLP is not carrying on any business operations for the period of one year or more and wants to close its business, it can make an application in Form No. 24 to the Registrar of Companies for declaring the company as defunct and removing the name of the LLP from its register of LLP’s.

Procedure for Strike off the name of LLP Voluntarily

The procedure is described below :

• An application is required to be made in e-Form 24 to the Registrar of Companies for Striking off the name of the LLP with the consent of all partners [Clause (b) of sub-rule 1 of Rule 37 of LLP Rules];
• LLP shall file overdue returns in Form 8 and Form 11 up to the end of financial year in which the LLP ceased to carry on the business or commercial operations before filing Form 24. [Clause (I) of sub-rule 1A of Rule 37 of LLP Rules];
• The following documents shall be enclosed along with Form 24-

a) A Statement of Account disclosing nil assets and nil liabilities, certified by CA in practice made up to a date not earlier then 30 days of the date of filing of Form 24. [Sub-clause (a) of clause (II) of sub-rule (1A) to Rule 37 of LLP Rules].

b) Affidavit signed by designated partners to the effect mentioned in sub-clause (b) of clause (II) of sub-rule (1A) to Rule 37 of LLP Rules.

c) Copy of acknowledgment of latest ITR[Sub-clause (c) of clause (II) of sub-rule (1A) to Rule 37 of LLP Rules].

d) Copy of LLP Agreement, if entered into and not filed, along with changes thereof in cases where LLP has not commenced busines or commercial operation since its incorporation. [Sub-clause (d) of clause (II) of sub-rule (1A) to Rule 37 of LLP Rules].

e) Copy of Authority to make the application duly signed by all partners. [Attachment (a) in Form 24].

f) Consent of all partners of LLP for striking off its name from the register. [Clause (b) of sub-rule 1 of Rule 37 of LLP Rules];

g) Certificate(s) or statement from the respective bank demonstrating closure of Bank Account. [Optional Attachment].

h) Indemnity Bond by Partners.

Overdue returns (Form 8 & Form 11)

Before the amendment in Limited Liability Partnership Rules, 2009 in 2017, if any LLP wants to make any application for striking off the name of LLP from the register, it has to file its overdues return before filing the said application. Sometimes it has been seen that LLP closed its business earlier and do not file its returns (Form 8 & Form 11) later on, however when they want to strike off LLP, then they have to file overdues returns with huge penalties.

Further, in exercise of the powers conferred by sub-sections (1) and (2) of section 79 of the Limited Liability Partnership Act, 2008 (6 of 2009), the Central Government has amended the Limited Liability Partnership Rules, 2009, by vide Notification No. G.S.R. 470 (E) dated 16.05.2017 as Limited Liability Partnership (Amendment) Rules, 2017 and gave relaxation to the LLP that those LLPs which have neither carried of their business not filed any return with concerned Registrar and want to struck off their LLPs, will have to file the overdue returns of the years in which the LLPs have actually worked i.e. before the date of closure of their business i.e. the LLPs need not to file any returns for the period in which the business was actually not carrying on, however a declaration shall be given by the Designated partners w.r.t. date of closure of their business.

Pursuant to Rule 37(1A)(I) of LLP Rules, the LLP shall file overdue returns in Form 8 and Form 11 up to the end of the financial year in which the LLP ceased to carry on its business or commercial operations before filing Form 24. Therefore, if any LLP wants to close its business, then it has to file its overdue returns in Form 8 and Form 11 up to the end of the financial year in which the LLP ceased to carry on its business or commercial operations, along with payment of additional fee of Rs. 100 per day.

In accordance with the aforesaid provisions, the LLP shall file overdue returns in Form 8 and Form 11 only the financial year till when it has ceased to carry on business operations. For instance, the LLP was having its operation and doing business for Financial year 2015-16 and thereafter ceased to carry on its operations, then it can make an application for strike off in Form 24 in the year 2021 without filing overdue Form 8 and Form 11 for the financial year 2016-17 to 2020-21.

Explanation: the date of cessation of commercial operation is the date from which the Limited Lability Partnership ceased to carry on its revenue generating business and the transactions such as receipt of money from debtors or payment of money to creditors, subsequent to such cessation will not form part of revenue generating business. 

Formats

Copy of Authority to make the application duly signed by all partners.

[Attachment (a) in Form 24].

To,

Name of Authorized Person
Address: _________,
City: _________,
Pin Code: ______
State: _________

Sub: Authorization to make Application to Strike Off the Name of the LLP to ROC

Dear Sir,

With respect to the subject matter cited above, the management decides to authorize you to file an application to the ROC to strike off the name of the LLP from their register.

An application in E-Form 24 shall be moved with the required documents as follows:

i. Consent of all the partners;

ii. Affidavit duly notarized;

iii. Copy of statement of assets & liability duly certified by CA in practice

iv. Copy of acknowledgment of latest income tax return.

v. Indemnity Bond by partners.

For __________ LLP

_______________
(Designated Partner)
Date: ______
Place:_______

Consent of all partners of LLP for striking off its name from the register.

[Clause (b) of sub-rule 1 of Rule 37 of LLP Rules]

I, Mr. ____________ , Partner of __________ residing at _________, _________, City : ___________, Pin Code : ______ State : _______________ hereby give my consent to make an application to the Registrar of Companies to strike off the name of our LLP from the register since the entity has not been active since the time of its incorporation.

I also hereby consent to all the formalities which are required to be done with respect to the closure of __________ LLP.

Mr. _____________
(PARTNER)

Affidavit

I, Mr. _____________ , Partner of _______________ LLP, (hereinafter called “the LLP”) incorporated on dated _________ under the Limited Liability Partnership Act, 2008 having its Registered Office at _________, _________, City : ___________, Pin Code : ______ State : _______________ and having LLPIN NO.: ___________ do solemnly affirm and state as under :

1. I, _____________ , am the Partner of the LLP stated above since ________.

2. My present residential address is at _________, _________, City : ___________, Pin Code : ______ State : _______________.

3. My permanent address is _________, _________, City : ___________, Pin Code : ______ State : _______________.

4. LLP has not commenced business or where it commenced business, it ceased to carry on such business from _______-

5. LLP has no liabilities and indemnifying any liability that may arise even after striking off its name from the Register;

6. LLP has not opened any Bank account and where it had opened, the said bank account has since been closed together with certificate(s) or statement from the respective bank demonstrating closure of Bank Account.

7. LLP has not filed any ITR where it has not carried on any business since its incorporation, if applicable.

8. There is no litigation pending against or involving the LLP.

9. In case of any loss (es) to any person or any valid claim and liability arising from any person after the striking off the name of LLP ___________ LLP from the Register of LLPs, I, the partner of the LLP, undertake to indemnify any person for such losses, valid claim and liability and the indemnity bond to this effect is being submitted separately with the application form.

I solemnly state that the contents of this affidavit are true to the best of my knowledge and belief and that it conceals nothing and that no part of it is false.

Signature: _______________________
(MR___________________)

VERIFICATION:-

I verify that the contents of this affidavit are true to the best of my knowledge and belief.

Signature: _______________________
(MR___________________)

Place:
Date:

Indemnity Bond

To,

The Registrar of Companies,

I, the Designated Partner of M/s _______LLP incorporated on dated _____ under Limited Liability Partnership Act, 2008 having its Registered Office at _________, _________, City : ___________, Pin Code : _____ State : ______do hereby declare that:

1. I, …………. S/o Sh. ………………..am Designated Partner of this LLP.

2. That I have made an affidavit dated duly sworn before notary public affirming that the LLP M/s ___________ has assets worth Rs. Nil. The LLP has no liabilities.

3. Further the LLP is not intending to do any business or commercial activity. Thus, the LLP is defunct and I request the Registrar of Companies, _____________ to strike off the name of the LLP from the Register of Companies in terms of Rule 37(1)(b) of the Limited Liability Partnership Act, 2008.

4. In view of the above, I do hereby undertake in writing:

i. to pay and settle all lawful claims arising in future after the striking off the name of the LLP.

ii. to indemnify any person for any such losses that may arise pursuant to striking off the name of the LLP.

iii. to settle all lawful claims and liabilities which have not come to our notice at this stage, even after the name of the LLP has been struck off in terms of Rule 37(1)(b) of the Limited Liability Partnership Act, 2008.

Place:
Date:

Signature:
Name: ………..
Father’s Name: Sh. …………..
Address:

Witnesses:
1.
2.

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Disclaimer: Nothing contained in this document is to be construed as a legal opinion or view of either of the authors whatsoever and the content is to be used strictly for educative purposes only.