Limited Liability Partnership is an improved version of Partnership firm that possess the features of both the Partnership firm and the company. This firm allows partners to operate a partnership firm under the LLP agreement executed by them. The various benefits associated with LLP include the limited liability of partners, perpetual succession, legal entity and much more. As LLP is a legal structure, just like every other company it is also required to fulfill certain compliance requirement. These form filing requirement are mandatory in nature thus complying with the said procedures are mandatory. In case any LLP fails to do the annual filing, the registrar can take an action against the said LLP and strike it off. Today with article we will be taking a look at the remedial actions available with the LLP in case the strike off action is initiated by Registrar of Companies.
What is strike off Limited Liability Partnership?
Strike Off of the Limited Liability Partnership is an action taken by the registrar of companies under Section 75 of the LLP Act, 2008 read with Rule 37 of the LLP Rules, 2009 if it deems fit. However, a opportunity of being must be given to the LLP before the final strike off is carried out.
What are the possible reasons for which LLP could be strike off?
There are multiple reasons for which an LLP could be strike off by the registrar of companies. Some of these are as follows –
Non-filing of Annual Compliances – An Limited Liability Partnership firm can be strike off by the ROC if it hasn’t filed the proper compliances required under the Limited Liability Partnership Act 2008. Every LLP is required to maintain certain books of accounts and the compliances thereof in order to be compliant with the rules and regulations made.
Non- Filing of Statement of Account and Solvency (Annual Filing) – The authorized representative of the company or a designated partner is required to file a statement Account & Solvency and Statement of Assets & Liabilities stating that the information provided is verified and has found it to be true and fair in his/her capacity. The solvency statement by the LLP must be filed in the LLP in LLP form 8.
Non-filing of annual return- An LLP must file its annual return in Form 11 within the 60 days of cessation of financial year. The return can be filed through online mode also with the ministry of corporate affairs.
Non-Functioning of LLP – If LLP is being non-operative for more than 2 years the registrar can take an action suo moto and strike off the name LLP from the registrar of Limited Liability Partnership.
Voluntary Strike Off – A Limited Liability Partnership can on its own will file the LLP form 24 with the registrar of companies to strike of its name from the registers.
What are the remedies available for LLP’s that are striked off?
As soon as the notice of strike of is given to the Limited liability Partnership for the strike of LLP its status changes to “Under Process of Strike Off”. The total time limit of 30 days is given to the LLP for making an appeal for making the status of LLP active again. The LLP desiring to make the status of LLP active again is required to submit the required evidences and the documents to the ROC stating the reasons that why LLP shall not be declared as de-active. The directors can themselves make a representation why they have failed to file the relevant financial documents. Moreover, the creditors and the stakeholders can also make an application for preventing the strike off of the company. Such request can be made by them if they believe that winding up of the LLP will make them incur a loss.
In this manner the LLP REGISTERED in India can prevent itself from getting de-active.