According to Section 75 of the Limited Liability Partnership Act, 2008 (“LLP Act”) where the registrar has the reasonable opportunity to believe that the LLP is not carrying on business or its operation in accordance with the provisions of the law, the name of the LLP may be struck off the register of LLP in such manner as may be prescribed.
Rule 37(1) of the Limited Liability Partnership Rules, 2009 (“LLP Rules”) provides the following manner in which a LLP may be struck off the register of LLP –
- Where the LLP is not carrying on any business or profession for the period of 2 (two) years or more and the registrar has the reasonable cause to believe the same, the registrar can suo moto take the action and send notices to the concerned LLP and all its partners specifying his intention to strike off its name from register.
- Where a LLP is not carrying on the business or operation for a period of 1 (one) year or more and has made an application to the registrar after taking consents of all its partners for the same.
The Government has vide Notification no. G.S.R. 470(E) dated May 16, 2017 issued the Limited Liability Partnership (Amendment) Rules, 2017 (“LLP Amendment Rules 2017”), whereby effective from May 20, 2017, a new sub-rule (1A) has been inserted after Rule 37(1) of the LLP Rules.
Accordingly, an LLP making application under Rule 37(1)(b) of the LLP Rules shall, before filling Form 24 requesting for striking off the its name, file an overdue return in Form 8 and Form 11 up to the end of the financial year in which it ceased to carry on the business or operations.
In terms of the LLP Amendment Rules, 2017, Form 24 (Application to the Registrar for striking off name) will now be accompanied by the following:
(a) a statement of account disclosing nil assets and nil liabilities, certified by a Chartered Accountant in practice made up to a date not earlier than thirty days of the date of filing of Form 24;
(b) an affidavit signed by the designated partners, either jointly or severally, to the effect,-
(i) that the LLP has not commenced business or where it commenced business, it ceased to carry on such business from ………….(dd/mm/yyyy);
(ii) that the LLP has no liabilities and indemnifying any liability that may arise even after striking off its name from the Register;
(iii) that the LLP has not opened any Bank Account and where it had opened, the said bank account has since been closed together with certificate(s) or statement from the respective bank demonstrating closure of Bank Account;
(iv) that the LLP has not filed any Income-tax return where it has not carried on any business since its incorporation, if applicable.
(c) a copy of the acknowledgement of the latest Income-tax return filed under the Income-tax Act,1961 (43 of 1961) and the rules made thereunder for the time being in force, where the LLP has carried out any business and has filed such return.
(d) copy of the initial LLP agreement, if entered into and not filed, along with changes thereof in cases where the LLP has not commenced business or commercial operations since its incorporation.
It may be noted that the date of cessation of commercial operation will be the date from which the LLP 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.
 Form 24 of Limited Liability Rules, 2009
Article authored by:
Hitender Mehta, FCS, FCA, LL.B.
Partner, Vaish Associates Advocates
Author: “Limited Liability Partnerships –Law & Practice” (by Wolters Kluwer India)