Wish to close your LLP? Here’s a list of 3 important rules for LLP Strike off that you should keep in mind

LLP- A mixture of two business forms

LLP (Limited Liability Partnership) is one of the most popular legal entities in India due to its features. In simple words it’s a mixture of the partnership firm and private limited company. 

The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP. 

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Strike off of LLP

In case where the LLP wants to close down its business or where it is not carrying on any business operations for a period of one year or more, it can make an application to the Registrar of Companies for declaring the company as defunct and removing the name of the LLP from its register of LLP’s.

Since May 2017, The Ministry of Corporate Affairs has amended Limited Liability Partnership Rules, 2009. With introduction of the Limited Liability Partnership (Amendment) Rules, 2017, LLP Form 24 has been introduced by the MCA and it is now possible to easily close an LLP by making an application to the Registrar for striking off the name of LLP.

Limited Liability Partnership (Amendment) Rules, 2017

(LLP strike off rules)

1. File Overdue returns

It is very important for a LLP making the application to the registrar for striking-off LLP name to file its overdue Statement of Accounts (Form 8) and Annual Return (Form 11) till the end of financial year in which the LLP has ceased to carry on its business or commercial operations.

So for e.g if the LLP have worked for FY 2016-17 and 2017-18 and thereafter ceased to carry on operations, then also it can make an application for strike off in Form 24 in the year 2020 without filing overdue Form 8 and Form 11.

2. Give an application in form 24

Where a limited liability partnership is not carrying on any business or operation for a period of one year or more then Along with specified documents, an application in e-Form 24 with the consent of all partners is to be filed with the registrar for strike off of LLP name from the registrar. 

3. The documents to be attached with e-Form 24 for LLP Strike off

(As amended by Limited Liability Partnership (Amendment) Rules, 2017)

• Statement of Accounts disclosing nil assets and nil liabilities.
• 1. The statement needs to be certified by a practicing chartered Accountant.
  2. The statement should not be older than 30 days from the date of filing.
• An affidavit signed by the designated partners, either jointly or severally.
• Copy of acknowledgement of latest ITR (Income Tax Return) filed, in case LLP has carried out any business.
• Copy of initial LLP Agreement, if entered into and not filed, along with any changes made in it in cases where the LLP has not commenced business or commercial operations since its incorporation.

Note: The date of cessation of commercial operation is the date from which the Limited Liability 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.

To know more on the “How to close LLP in India- Procedure”, you may also get in touch with Ebizfiling for a convenient strike off your LLP.