LLP Closure / Strike Off

The primary legislation governing LLP closure or strike off in India is the Limited Liability Partnership Act, 2008. Specifically, Section 74 of the Act empowers the Registrar of Companies (ROC) to strike off the name of an LLP from the register if the Registrar has reasonable cause to believe that the LLP is not carrying on business or is not in operation. The detailed procedure is outlined in Rule 37 of the LLP Rules, 2009, which provides for an application for striking off the name of an LLP.

The government department responsible for LLP closure or strike off is the Ministry of Corporate Affairs (MCA). The process is carried out through the Registrar of Companies (ROC) having jurisdiction over the registered office of the LLP. The official portal for filing applications is the MCA21 portal (www.mca.gov.in). All forms and documents for business closure must be submitted electronically through this portal.

The process for LLP closure or strike off involves the following steps:

1. Board Resolution: The designated partners must pass a resolution authorizing the closure and appointing a partner to sign the application.
2. Settlement of Liabilities: The LLP must settle all its debts, liabilities, and obligations. An indemnity bond may be required.
3. Filing Form 24: The LLP must file Form 24 (Statement of Account and Solvency) with the ROC, along with a declaration that the LLP has no assets or liabilities.
4. Filing Form 25: The application for striking off is made in Form 25 (Application for Striking Off Name of LLP) along with the prescribed fee.
5. ROC Review: The ROC examines the application and may issue a notice to the LLP or its partners. If satisfied, the ROC publishes a notice in the Official Gazette.
6. Strike Off: After 30 days from the Gazette notification, the name of the LLP is struck off from the register.

The key forms required for LLP closure or strike off are:

• Form 24: Statement of Account and Solvency – to be filed within 30 days of the resolution.
• Form 25: Application for Striking Off Name of LLP – the main application form.
• Indemnity Bond: An indemnity bond executed by the designated partners indemnifying the ROC against any future claims.
• Affidavit: An affidavit by the designated partners confirming that the LLP has no assets or liabilities and that all creditors have consented.

All forms are available on the MCA21 portal.

An LLP is eligible for strike off if it meets the following conditions:

• The LLP has not commenced business within one year of incorporation.
• The LLP is not carrying on any business or operation for a period of one year.
• The LLP has no assets or liabilities (or has settled all debts and obligations).
• The LLP has filed all annual returns and financial statements up to the date of closure.
• The LLP has obtained consent from all creditors, if any.
• The LLP is not involved in any pending litigation or regulatory proceedings.

If the LLP does not meet these conditions, it may need to follow the winding up process under the LLP Act.

The timeline for LLP closure or strike off depends on the ROC's processing time. After filing Form 25, the ROC typically takes 30-60 days to review and issue a notice. If no objections are raised, the name is struck off after publication in the Official Gazette. The entire process may take 3-6 months from the date of application. However, no specific timeline can be guaranteed as it varies by ROC.

The government fees for LLP closure or strike off are prescribed under the LLP Rules, 2009. The fee for filing Form 25 is as follows:

Additional fees may apply for late filing of annual returns or other documents. The fees are subject to change as per MCA notifications.