A limited liability partnership (LLP) having no business operations for a period of one year or more can be closed down easily by striking off the name of defunct LLP. To close an LLP, a voluntary winding or winding-up by tribunal methods are available. However, a defunct LLP, which has not carried on any business or operations for a period of one year or more can be removed from the LLP register by striking off the name.
If a Limited Liability Partnership (LLP) has not carried on any business or operation for a period of one year or more, the Registrar or the LLP can initiate the process for removal of the LLP name from the register. The process for striking off the name of LLP can be initiated only on an LLP that has no activity or operation for a period of one year or more. In case of an active LLP, or an LLP having recent activity, winding up can be initiated voluntarily or by tribunal only.
Procedure for Striking Off Name
The procedure for striking off the name of LLP can be initiated by the Registrar or by the LLP in e-Form 24 with the consent of ALL partners. On receiving the application, the Registrar would send a notice to the limited liability partnership and all its partners, of his intention to remove the name of the limited liability partnership from the register and requesting them to send their representations along with copies of the relevant documents, if any, within a period of one month from the date of the notice. The notice for striking off the name of LLP is also placed on the MCA website for the information of the general public.
On completion of the time mentioned in the notice, if there are no adverse representations from the LLP partners or the general public, the Registrar could (if satisfied), strike off the LLP name from the register and publish a notice in the Official Gazette. On publication of notice of striking off the name of LLP in the Official Gazette, the limited liability partnership would stand dissolved.
Note: The Registrar can provide order for striking off the name of LLP only if he/she is satisfied. The Registrar must also satisfy him or herself that sufficient provision has been made for the realization of all amount due to the limited liability partnership and for the payment or discharge of its liabilities and obligations by the limited liability partnership within a reasonable time.
Partners Liability after Striking Off
In case of striking off the name of LLP, the liability of all designated partner of the limited liability partnership would continue and may be enforced as if the limited liability partnership had not been dissolved.
Also if any partner or creditor, feels aggrieved by the LLP having been struck off the register, an application can be made to the Tribunal for restoring the LLP before the expiry of five years from the publication in the Official Gazette. If satisfied with the application for restoration of LLP, a Tribunal can order the LLP be restored to the register and place all partners in the same position as nearly as if the name of the LLP had not been struck off.
Process to follow for strike off on application of the company
Holding a Board Meeting: to hold a Board meeting to pass Board Resolution for strike off the company subject to the approval of the shareholders and authorizing the filing of this application with the ROC;
Filing of Form STK-2:
Application in Form STK- 2 to be filed by the Company along with following documents:
(i) Indemnity Bond duly notarized by every director in Form STK 3;
(ii) An affidavit in Form STK 4 by every director of the company;
(iii) a statement of accounts containing assets and liabilities of the company made up to a day, not more than thirty days before the date of application and certified by a Chartered Accountant;
(iv) a copy of the special resolution duly certified by each of the directors of the company or consent of seventy-five percent of the members of the company in terms of paid-up share capital as on the date of application;
(v) a statement regarding pending litigation, if any, involving the company.
Public notice by ROC: After filing the application for strike off by the company, the ROC shall publish a public notice in Form STK-6 inviting objections to the proposed Strike off, if any. The objections are to be sent to the respective ROC within thirty days from the date of publication. The notice shall be placed on the website of Ministry of Corporate Affairs, published in the Official Gazette and published in a leading English newspaper and at least in one vernacular newspaper where the registered office of the company is situated.
Intimation to regulatory authorities: The ROC shall simultaneously intimate the concerned regulatory authorities regulating the company, viz, the Income-tax authorities, central excise authorities, and service-tax authorities having jurisdiction over the company, about the proposed action of removal or striking off the names of such companies and seek objections, if any.
Publication of notice of dissolution: ROC, after having followed and dealt with the above steps, shall strike off the name and dissolve the Company and a Notice of striking off and its dissolution to be published in the Official Gazette in Form STK 7. On the publication in the Official Gazette of this notice, the company shall stand dissolved with effect from the date mentioned therein. The same shall also be placed on the official website of the MCA.