Eligibility for Voluntary Strike Off

• No Business Operations: To be eligible for voluntary strike off, the LLP must not have carried out any business activity either since its incorporation or for at least one year prior to applying. This is to ensure that only inactive or dormant LLPs are considered for closure. Active LLPs are not allowed to apply under this route.
• Consent of All Partners: All the partners of the LLP, including designated partners, must agree to the closure. A resolution approving the voluntary strike off must be passed and documented. Without unanimous consent, the LLP cannot proceed with the application.
• Filing of Pending Returns: Before filing for strike off, the LLP must clear all its pending annual compliance forms like Form 8 (Statement of Account) and Form 11 (Annual Return). Additionally, a recent Statement of Account, showing nil assets and liabilities, must be prepared and certified by a Chartered Accountant within 30 days of filing Form 24.
• No Ongoing Legal Proceedings: The LLP must not be involved in any legal case, investigation, or dispute. If any such proceedings are pending, the LLP is not eligible to apply for strike off. This ensures that closure is not used as an escape from legal liabilities.
• Clearance of Liabilities: The LLP should have no outstanding liabilities at the time of applying for strike off. All dues to creditors, government authorities, or third parties must be cleared. If creditors are involved, their written consent is required for the closure.
• PAN and Other Registrations: Before strike off, the LLP should surrender its PAN, GST, or any other business-related registrations. This helps avoid future complications or compliance notices from tax or regulatory departments after the entity is officially closed.

What are the Reasons for Compulsory Strike off by ROC?

• Failure to Commence Business within One Year: If a company fails to begin its operations within one year from the date of incorporation, the ROC can strike it off. This provision is especially applicable to companies formed without genuine business intent or those used as shell entities.
• Non-filing of Annual Returns and Financial Statements: Companies that have not filed their financial statements or annual returns for a continuous period of two financial years are considered non-compliant. In such cases, the ROC can initiate the process of compulsory strike off under Section 248(1) of the Companies Act, 2013.
• Company Not Carrying on Any Business or Operations: If a company is found inactive for two preceding financial years and has not applied for dormant status under Section 455, the ROC may presume it to be defunct. This leads to action for removing the name from the Register of Companies.
• Physical Verification Reveals No Business Activity: The ROC may conduct physical verification of the company’s registered office. If it is found that no business is being carried out or the office doesn’t exist, the company can be struck off under legal provisions.
• Default in Statutory Compliance: A consistent failure to comply with statutory obligations such as GST filings, TDS returns, or secretarial compliances reflects non-functioning status. The ROC can consider such defaults as valid grounds for striking off the company.
• Company Not Responding to Notices from the ROC: When the ROC issues notices for compliance or clarification and receives no response from the company, it may interpret the silence as non-existence or abandonment. This can lead to the initiation of strike off proceedings.
• Company Not Having a Proper Registered Office: Under Section 12 of the Companies Act, every company must maintain a registered office capable of receiving communications. If it fails to do so, and the notice sent by ROC is returned or undelivered, it could trigger compulsory strike off.
• Fraudulent Incorporation or Misrepresentation: If it’s found that the company was incorporated using false or misleading information or forged documents, the ROC has the authority to strike it off. Such companies are seen as a threat to the regulatory framework and are removed immediately upon discovery.