LLP Striking Off
Close Inactive LLP Easily
An inactive or defunct LLP may be closed quickly by making an application in Form No 24 to the ROC for striking off the LLP by the ROC. We assist in closing the LLP quickly in online mode.
Winding up an LLP
The Limited Liability partnership is a basic partnership in which all the partners share limited liabilities as the LLP is set up under certain legal terms and documentation. There is a specific process as to how an individual can register his or her LLP. As there are advantages of registering as an LLP in India, there are also some disadvantages. Many of them are also unsure about the process of Winding up an LLP.
Section 63,64 and 65 of the LLP Act,2008 regulates the process of winding up of the LLP. The Limited Liability Partnership winding up can be initiated voluntarily or by a tribunal.
Methods of winding up llp
Winding Off: In an NCLT winding off, the LLP comes to an end and can not be revived in due course of time; the liquidator sells all the assets of the LLP and settles off the liabilities from the proceeds of the liquidation process. The winding-up is final and brings a definite end to the LLP, and no one remains liable for the outstanding liabilities that could not be paid during the liquidation process.
Striking off the LLP by declaring it as Defunct
When an LLP is inactive for over one year, and there is no business operation, the easiest method is to make an application for striking off the name of LLP under Rule 37 by filing Form 24.
Voluntary Winding Up of LLP
The LLP makes an application for its winding up to the NCLT, with the consent of 3/4 majority of partners, it may apply to wind up the LLP voluntarily. The voluntary winding up is conducted by the Liquidator, who sells the assets of the LLP and pays the creditors from the proceeds. Based on the liquidator report, the NCLT passes the order to Windup the LLP on its satisfaction in the given facts and circumstances.
Compulsory Winding Up of LLP of By NCLT
On an application by the creditors to whom the LLP is unable to pay its debt, or on an application by any partner, the ROC or the Government of India, the NCLT may start the compulsory winding-up process. An LLP Liquidator is appointed to dispose of the assets and pay the debts of the LLP, and if satisfied, the NCLT makes an order for compulsory winding up of the LLP.
Striking Off: Whereas a striking off the LLP is a process based on the declaration of the partners of the LLP, and no official liquidator is involved. Based on the affidavits of truthfulness and an indemnity bond from the partners that they shall be personally liable for any future liability of the LLP, the ROC strike off the name of the LLP. The effect of the striking-off of the LLP is that there is no compliance requirement, and for all practical purposes, the LLP has been closed. However, in case there are any government dues, tax dues or any liability that comes up after the striking-off, the LLP, the partners of the LLP remain personally responsible. Before filing for striking off, we advise you to settle all disputes, accounts and pay all dues.
Stepwise Process of Making an application to Strike Off the LLP
Partners Meeting
Convene a meeting of all the partners and obtain consent from all the partners for making an application to strike off the LLP.
Sale of Assets and Payment of Dues
If the LLP has any assets, first sell them and pay all the liabilities so that therein NIL asset and NIL Liability in the LLP.
Close Bank Account
The bank account of the LLP need to close and obtain a closure certificate from the banker along with the final statement.
Statement of Account
Prepare a statement of account and get it certified by a Chartered Accountant in practice. The statement should not be older than 30 days on the date of filing form 24.
Affidavits and Indemnity Bond
All the partner has to swear in an affidavit about the truthfulness of the particulars of documents and information being filed in Form 24. The partners are also required to sign an Indemnity Bond taking personal responsibility for any future liability that may arise for the LLP.
Filing of Form 24
Finally, the prescribed form 24 for striking off the LLP is filed with the ROC along with the scan copy of supporting documents, the Form 24 is filed with the DSC of partners and need Certification from CA.
List of Documents for Filing Application to Strike Off the LLP
| S.No | Document |
|---|---|
1. | Consent of all the partners |
2. | Bank Closure Statement |
3. | CA Certified Statement of Accounts |
4. | Copy of ITR Acknowledgement of LLP |
5. | LLP Agreement |
6. | Affidavits of all partners |
7. | Indemnity Bond of all partners |
8. | Identity and Current Address Proof of partners |
Striking off Defunct or Inactive LLP Under The Rule 37 of the LLP Rules 2019
For the defunct LLP, which has had no business activities for more than one year, rule 37 of the LLP Act lays down an easy method to close the LLP by filing a simplified application to the ROC in Form 24. The closing of an LLP via Form 24 is known as the Striking Off the Name of the LLP From the register of LLP maintained by the ROC. For striking off the name of the LLP, the designated partners must settle the books of account of the LLP, sell all the assets of the LLP pays the debts and liabilities. The conditions for applicability of Rule 37 for striking off LLP is as under.
Stamp Duty & Notary
All the partners of the LLP have to file an affidavit and indemnity bond prepared on the appropriate value of the Non-Judicial Stamp paper. The affidavits and the indemnity bonds are required to be witnessed/attested by a Notary Public.
The stamp duty may differ from state to state; hence you should check the appropriate stamp paper value from the local vendors; generally, Rs 100 stamp paper is applicable for indemnity bond and Rs. 50-100 is applicable on affidavits.
The Notary attestation is an activity where the deponent of the affidavit of the person making the indemnity bond signs in the presence of the Notary. Hence, you should take the affidavits and indemnity bond after purchasing the stamp paper to the local Notary’s office for attestation.