Strike off of LLP under LLP Amendment Act 2017
Strike off/ Winding up of Limited Liability Partnership
To make things easy for non-functioning or defunct LLP’s to wind up the LLP, the central government has introduced a simplified process of strike off by amending the Limited Liability Partnership Act 2009.
This amendmendment is called Limited Liability Partnership (Amendment) Rules, 2017, introduced on 16th May 2017.
By introduction of this sub rule under Rule 37, the procedure for striking off of LLP has been made simpler.
Amendment in brief
The limited liability partnership referred to in clause (b) of sub-rule (1) of rule 37 shall, (I) file overdue returns in Form 8 and Form 11 up to the end of the financial year in which the limited liability partnership ceased to carry on its business or commercial operations before filing Form 24
Explanation: The date of cessation of commercial operation is
the date from which the Limited Liability Partnership ceased to carry on its revenue generating business and
Items not included in revenue generating business
the transactions such as receipt of money from debtors or payment of money to creditors, subsequent to such cessation
Steps to be Taken
1.File overdue forms (Form 8 & Form 11) till LLP ceased to carry on its business or commercial operations
2.File Form 24
3.Enclose the following along with Form 24
(i) 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
(ii)an affidavit signed by the designated partners, either jointly or severally, stating the date of cessation of business, indicating that the LLP does not have any liability and indemnifying in case of any liability after strike off, closure of bank account.
(iii)A copy of acknowledgement of last ITR Filed
(iv)Copy of initial LLP agreement, if entered into and not filed
Fee for filing form 24 – Rs.500
A brief of prior to this amendment
Prior to amendment of Rule 37, an LLP had to file all its overdue forms (Form 8 and Form 11) prior to proceeding for Strike off. It meant that even if a company has not carried out any activity from incorporation, or failed to file forms due to non-operation of LLP thereafter, it had to file all its overdue return before proceeding for strike off.
In case of delayed filing, an additional fee of Rs.100 for each day of delay, were charged as additional fees, with no upper cap to such additional fees. Therefore, for LLP with outstanding filing had to bear with the additional financial burden. This is even so for LLP’s that never commenced any business.
The amendment in the Rules brings a major reprieve to the LLPs who have not filed Form 3, the LLP Agreement, as the LLPs can go ahead with the filing of Form 24 for Strike off.
For other LLP’s, which ceased to carry out business or commercial operation, they can file form 24 and strike off, if all forms till the period of cessation is filed. If not, they can file forms only till the period of cessation/commercial operation and proceed for strike off, by filing form 24.