A Step-by-Step Guide to Voluntary Strike Off of LLP

In the dynamic landscape of business, circumstances can change, and ventures may need to be dissolved for various reasons. When it comes to Limited Liability Partnerships (LLPs) in India, the process of voluntary strike off provides a systematic and legal way to wind up the affairs of a defunct LLP. In this blog, we will delve into the concept of voluntary strike off of LLP, its significance, and the step-by-step process to navigate the closure smoothly.

Understanding Voluntary Strike Off

Voluntary strike off is a formal procedure that allows an LLP to apply for its name to be struck off from the Register of LLPs maintained by the Ministry of Corporate Affairs (MCA). This process is available to LLPs that have ceased to carry on their business activities and wish to formally dissolve their entity.

Importance of Voluntary Strike Off

Voluntary strike off is an essential mechanism for LLPs that are no longer operational or have fulfilled their purpose. By voluntarily dissolving the LLP, the partners can ensure compliance with regulatory requirements, avoid unnecessary legal and financial liabilities, and maintain a clean slate for future endeavors.

Step-by-Step Guide to Voluntary Strike Off of LLP

Partner Consent:

Before initiating the strike off process, all the designated partners of the LLP must unanimously consent to the closure decision. This decision should be documented in writing as a resolution.

Settle Liabilities:

The LLP should clear all its existing liabilities, debts, and dues. Any pending statutory compliances, such as tax filings, should be completed before proceeding with the strike off.

Clearance Certificate:

Obtain a clearance certificate from all the creditors confirming that there are no outstanding dues or liabilities against the LLP. This certificate strengthens the case for a smooth strike off.

Disclosure of Assets and Liabilities:

Prepare a statement of assets and liabilities of the LLP as of the date of cessation of business. This statement must be signed by all the designated partners.

Application for Strike Off:

File the Form 24 with the Registrar of Companies (RoC) within 30 days from the date of passing the resolution for strike off. Form 24 contains details of the LLP, partners, and reasons for strike off.

Public Notice:

Publish a public notice in a prominent English and regional language newspaper announcing the LLP's intention to be struck off. The notice should invite objections, if any, from the public.

Objection Period:

The public notice must run for at least 30 days. If there are no valid objections from any stakeholders during this period, the process moves forward.

Dissolution Certificate:

If the RoC is satisfied with the application and no objections are received, a notice of strike off will be issued. Once this notice is published in the Official Gazette, the LLP will be considered dissolved.

Publication in Official Gazette:

The final step involves the publication of the strike off notice in the Official Gazette of India, after which the LLP is deemed dissolved.

Conclusion

Voluntary strike off of LLP is an essential legal process that offers a structured approach to closing the operations of a defunct entity. By adhering to the step-by-step guide mentioned above, LLP partners can ensure a seamless closure while complying with legal requirements.