Close Inactive or Defunct LLP Easy Strike-off Method (Form 24)
Winding up, closure, or strike-off of your LLP (Limited Liability Partnership) quickly by applying to ROC in Form 24. We help you understand the process, draft documents, and then prepare and file the LLP Form 24 to close or strike off the Inactive or defunct LLP In India.
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Eligibility Checklist for Closing the LLP
| ✅ It should have been inactive for the last year | ✅ The LLP should not have assets or liabilities |
| ✅ The Bank Account of the LLP to be closed | ✅ The LLP should have filed its Annual Returns |
| ✅ There should not be any Pending Litigation | ✅ The designated partner must have an active Digital Signature |
Legal Provisions for striking off a defunct or inactive LLP
Striking-off is a fast-track method introduced by the MCA to close up an LLP. The process is quite simple and carried out by the Registrar of Companies. No involvement of the NCLT is required. However, the eligibility or applicability of an LLP to get struck off is determined by the provisions mentioned in Rule 37 of the LLP Rules, 2009. So, let us discuss these provisions in detail.
| Rule | Legal Provisions |
|---|---|
| 37 (1) (a) | For ROC Suo Motu Closure of LLP.If an LLP has not carried out any business transaction for the past two years or more or has not filed the annual returns of the LLP in Form 11 and Form 8, the Registrar of Companies (ROC) can take suo motu action for striking off the LLP. |
| 37 (1) (b) | Application by Partners of the LLP for ClosureThe partners of the LLP can apply for the LLP Striking Off in case the LLP has not carried out any business for the past year or more. The application to close the LLP by partners is filed in Form 24 to the ROC |
Meaning of Year for LLP Closure Purpose
In the context of LLP striking off, the term “year” refers to a continuous period of 12 months; it is neither a full calendar year nor a financial year. In order to become eligible for LLP Striking Off, the LLP must remain inactive for a continuous period of twelve months; in other words, the LLP must not have conducted any business during such period of inactivity.
Striking Off Vs Winding Up or Liquidation of LLP
You may come across words such as striking off the inactive LLP, which is also the focus of this page, where we are discussing in detail the process and documents needed to strike off the LLP from the Register of the LLP maintained by the Registrar of Companies. Striking off is the easiest method to close an inactive or defunct LLP by applying to ROC (Form 24). The following table summarises the critical difference between a Striking Off, The Winding Up and the liquidation of an LLP.
| Striking Off | Winding Up/Liquidation |
|---|---|
| The striking off is an easy method of closing an LLP (Filing Form 24) that has been inactive & has not carried out any business activity in the past year. The Partners should first dispose of all the assets, pay the liabilities, and ensure that no business activity has occurred in the past year (a continuous 12-month period) | The winding up or liquidation is a process where a winding-up petition is filed before the NCLT for the dissolution of the LLP. The NCLT appoints a liquidator to deal with the assets and liabilities or claims against the LLP and then passes an order to dissolve the LLP. The process is cumbersome and costly in comparison to striking off. |
Suitability
| Suitability
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Key Points of Striking Off
- Easy & Online Method
- Most Cost-Effective Method
- Applicable to Inactive LLP
- Government Fee: ₹500 to ₹1000
- As per LLP Act, 2008
List of Documents for Filing Application to Strike Off the LLP
| ✅ Copies of consent from all partners and creditors | ✅ Affidavits from all designated partners |
| ✅ Indemnity Bonds from all partners | ✅ Statement of Accounts duly certified by a practising Chartered Accountant |
| ✅ Copy of acknowledgement of latest Income tax return | ✅ Bank closure statement and Bank Closure Letter |
| ✅ Copy of the LLP Agreement, with amended provisions, if any |
Stepwise Process of Making an Application to Strike Off the LLP
The process to strike off an LLP is entirely digital and paperless, and no physical document is submitted to the ROC. The initial preparation involves the preparation of the documents to be filed as attachments with Form-24 of the LLP. The required documents include the designated partner ID and address proof; they are also required to swear an affidavit for the correctness of filing and an indemnity bond to pay any future dues after the LLP is struck off. The following are the steps to take to strike off an inactive LLP in India.
Step 1: Obtain Partner's Consent for LLP Closure
The first step in closing the LLP by striking off is to obtain the unanimous consent of all partners. This means that every partner must agree to the closure of the LLP. For this purpose, the standard practice is to call a meeting of all the partners of the LLP, and in the meeting, a decision to close the LLP should be made. The LLP should also authorise one or more designated partners to do the documentation for the LLP Striking off
Step 2: Surrender all Registrations such as GST
The partner's affidavit and the indemnity bond expressly declare that the LLP has no assets or liabilities. In order to make the above declaration, it is imperative to pay all the government dues and surrender the registrations or licences obtained by the LLP. These include GST registration and filing of the Final GST-10 Return. In case there are other industry-specific licences, like FSSAI, drug licences, etc., in the name of the LLP, these should be surrendered before filing the striking-off application for the LLP.
Step 3: Close the Bank Account of the LLP
If the LLP has opened/operated a bank account, then the same needs to be closed. Obtain a closure certificate and the Bank Statement from the date of its opening up to the date of closure. The closure letter is filed as a mandatory attachment with application form 24 to strike off the LLP.
Step 4: Obtain a CA Certified Financial Statement.
Obtain a CA-certified statement of account certifying that the LLP has no assets or liabilities. For this purpose, we advise you to recheck your books of account. If there are any assets or liabilities, first settle them and make your LLP ready for the strike-off. The next step would be to engage a practising chartered accountant to check and certify the account statement. Please note that the financial statement should not be older than 30 days from the date of filing Form 24 for striking off the LLP.
Step 5: Affidavits and Indemnity Bond by the Designated Partners
All partners will have to swear affidavits declaring the inactivity of the LLP for the period mentioned, that everything that is being filed in the striking-off application is correct, and that all the information furnished is accurate. The designated partners (DP) are also required to give an indemnity bond that they will continue to remain personally liable for any future claim or dues once the LLP is struck off/closed. The affidavit and the indemnity bond executed by the designated partners need to be accompanied by the appropriate stamp paper value, which varies from state to state. Further, the affidavit and indemnity bond must also be notorised.
Step 6: Filing of Application Form 24 for Striking Off
Finally, after all the prerequisites are fulfilled, you can proceed with preparing e-form 24. Attach/upload the scanned copies of all the necessary attachments. Form 24 is filed online on the mca portal (www.mca.gov.in) after its digital authentication using the www.mca.gov.in after its digital authentication using the digital signature of any of the LLP designated partners. Pay the prescribed ROC fee for striking off the LLP.
Step 7: Strike-off by the ROC
Upon receiving the application, the ROC examines it thoroughly for any discrepancies. If the application and attached documents are found to be in order, the ROC will publish a notice of its intention to strike off the LLP in the Official Gazette and on the MCA website, ensuring complete transparency. This notice typically remains open for a period of around 30 days, during which the general public can raise objections. If no valid objections are received within the stipulated time, the ROC will proceed to strike off the LLP, and its status on the MCA website will subsequently be updated to "struck-off" after due verification.
Benefits of Striking-off inactive LLP
No Compliance
Even an inactive LLP has to comply with all the compliance requirements under the LLP Act, 2008 and file the ITR for the LLP. This is a burden when the LLP has little financial resources.
No Penalties
An LLP does not have a huge number of compliances, but the penalties for non-compliance are extremely high. So, to avoid these unnecessary expenses, it is better to strike the LLP off.
Better Utilisation of Resources
There is no use prolonging the continuity of a business that is continuously failing to perform. Instead, you can shut it off and utilise whatever little resources it has for a better purpose.
Option to restore operations
Striking-off is a temporary closure, and you can restore a struck-off LLP by appealing against the ROC’s order in the NCLT within five years from the date on which the LLP was struck off.
How can Setindiabiz Help?
The wisest course of action when your LLP has been defunct or inactive for a very long period of time is to strike it off voluntarily. By doing this, you may spare your business from high operational costs when it is not making any money and revive it once you are confident of its financial health. Sounds practically viable, doesn’t it? Our complete end-to-end services of LLP closure include
- Checking eligibility of the LLP for being struck off under Rule 37 of the LLP Rules, 2009
- Obtaining & drafting all the necessary documents to be attached to Form 24
- Filing application form 24 to the ROC
- Tracking the status of the application till the LLP is finally struck off by the ROC
So what are you waiting for? Contact our compliance advisors immediately, and get your LLP struck off in no time, and at minimal costs!
Frequently Asked Questions
No, LLP cannot be struck off within one year of incorporation. If the LLP applies to get struck off voluntarily by filing form 24, it has to be defunct for at least one year.
Striking off an LLP implies that the Registrar of Companies has removed its name from the Register it maintains. This option is applicable only if the LLP has been defunct or inactive for a prescribed period and has no assets and liabilities throughout its duration of inactivity. If any liabilities still arise after striking off, the designated partners will be liable to pay them off. An LLP can still be restored after it has been struck off.
On the other hand, winding up is the complete closure of an active LLP by the NCLT. Here, the assets and liabilities of the LLP are settled by an insolvency professional, and once the LLP is wound up, it cannot be further restored by any means. Moreover, no liabilities or amounts are due after the LLP is wound up.
The annual returns of the LLP in Form 11 and annual financial statements in Form 8 need to be filed for the financial year in which the LLP was active. For example, if the LLP was active until 25th October 2020, then the FY 2020-21 annual return and financial statements must be filed before the LLP Striking Off application is filed. However, there is no need to comply with the annual filings for the period in which the LLP has been inactive.
The law is that the LLP must file the LLP agreement in Form 3 within 30 days from the date of its incorporation. However, if the LLP fails to file the agreement in the prescribed period, the copy of the LLP Agreement must be filed as an attachment to Form 24.
If the LLP has commenced the business operations and subsequently becomes defunct, the ITR must be filed for the financial years when the LLP was active. However, if the LLP cannot start the business operations anytime after incorporation, the LLP may file For 24 without filing the ITR.
The government fee for filing Form 24 for striking an LLP is Rs 500.
If an LLP, any of its partners or creditors feel aggrieved by the LLP having been struck off, it can appeal to the NCLT before the expiry of 5 years from the publication of the notice of strike-off by the ROC in the official gazette. The final decision on restoration will be made by an order from the NCLT.
