CS Rashi Jain
Quick Summary
We often start new businesses with great enthusiasm but not every time it flourishes and there comes a time when you have to choose between turning the page and closing the book. Same in the cases of LLP's. Some people start this form of business but fails to operate and comply with the provisions of law properly and ultimately resulting into heavy penalties. As in case of LLP’s there is no maximum penalty it increases day by day until the default continues. Hence it is advisable to close such business at that point of time only.
Eligibility criteria
- Cease of Business operations for 1 year or more.
- Complied with annual compliance for the period up to its operations.
Procedure for striking off an LLP
- Firstly conduct a meeting of partners to discuss and pass resolution to decide that an application should be made to ROC for striking off the name from its Register and authorizing a Partner to perform such actions in this regard on behalf of LLP. (3/4th majority required).
- Prepare Consent of partners to apply for striking off application.
- Authorize a Practicing Chartered Accountant to sign and certify the documents and statement of solvency as on that date.
- A Declaration should be made to declare that we wish to close the LLP from such date, close Bank Accounts of the LLP, No due liabilities and no Secured and Unsecured Creditors. Etc
- Authorization must include the documents we are providing along with the application to ROC.
- An application should be made to ROC having the reason for not carrying on of the business.
- File Form 24 with ROC. With the prescribed fees.
Mandatory Attachments
- Copy of Authority to make application duly signed by all the partners.
- Copy of acknowledgement of latest Income Tax Return Filed.
- Statement of Accounts disclosing nil assets and nil liabilities not earlier than 30 days of the date of filing.
Other attachments
- Affidavit on stamp of Rs. 50 for each partner.
- Indemnity Bond on stamp of Rs. 200.
- Consent of Partners and Creditors.
- Resolutions and Declaration.
- PAN, AADHAR of all the Partners.
Note
- UDIN should be mentioned on the Statement of Accounts.
- Stamp Paper should be scanned from both sides.
- Proof of Closure of Bank Account should be attached.
- Latest ITR Copy should be attached.
- Disbursement of Capital Contribution certified by professional.
8. Once the Application is approved the ROC will issue a notice under Rule 37(1) of the LLP Rules 2009, that at the expiration of 30 days unless the cause is shown to the contrary, will be struck off from the Register and the LLP will be dissolved.
FAQ :
Striking off is a procedure to close an LLP by removing its name from the Register of Companies maintained by the Registrar of Companies (ROC).
To be eligible for striking off, the LLP must have ceased business operations for one year or more and must have complied with all annual compliances up to the period of its operations.
The first step is to conduct a meeting of partners to pass a resolution (requiring a 3/4th majority) to apply to the ROC for striking off the LLP's name and to authorise a partner to handle the process.
Mandatory attachments include a copy of the authority to make the application signed by all partners, acknowledgement of the latest Income Tax Return filed, and a Statement of Accounts disclosing nil assets and nil liabilities not older than 30 days from the filing date.
Once approved, the ROC will issue a notice stating that after 30 days, unless cause is shown to the contrary, the LLP's name will be struck off the Register, and the LLP will be dissolved.
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