Compliance

Strike Off for PLCs and LLPs

The Ministry of Corporate Affairs (MCA) of India has introduced Strike Off to help business owners of non-profitable and inoperative companies, get their company’s name struck off from the register. It is important for non-functioning companies to remove their name from the register on time to avoid penalties and any legal actions against your company.

As per the Companies Act (2013), Strike Off allows the Registrar of Companies (ROC) to remove a company’s name from the register as its initiative. Companies can also voluntarily submit an application to remove their names from the register without court intervention.

   

Eligibility for Voluntary Strike off

  • Companies that do not have any assets or liability.
  • Companies that have failed to commence any business activity or operation within one year of its incorporation.
  • Companies that have not been operational in the last two financial years.
  • Companies where subscribers to the memorandum have not paid the subscription which they had undertaken to pay at the time of incorporation of the company and a declaration in form INC-20A to this effect has not been filed within one hundred and eighty days of its incorporation.
 

Companies that are not eligible for Strike Off:

  • Listed Companies
  • Delisted companies as a result of non-compliance
  • Vanishing Companies – Companies that cease to file their statements of return after raising capital, and whereabouts of their registered office or directors are not known
  • Companies that are subject to investigation or have pending prosecutions in court
  • Companies that have accepted public deposits, and those deposits are outstanding or defaulted in repayment
  • Companies that have secured a loan or where repayment of debt is pending to banks or other financial institutions and in this regard no objection certificate is not obtained
  • companies having charges which are pending for satisfaction
  • Companies that have tax dues
 

Documents for the application of strike off

  • Application for strike off in form STK-2 with a fee of INR 10,000/-
  • Copy of board resolution authorizing the filing of application for strike off
  • No Objection Certificate from other regulatory authorities for any pending dues, enquiry or complaint.
  • Duly notarised Indemnity bond from all directors in form STK-3, either jointly or severally
  • Statement of Account certified by a Chartered Accountant which shall not be older than thirty days from the date of application.
  • Affidavit from all directors of the company in form STK-4
  • Special Resolution passed by the Shareholders or Consent Letter from seventy-five percent of the members of the company as on the date of application
  • A statement in relation with pending litigations, if any or declaration from directors regarding no pending litigations
  • If the Director  is a foreign national or non-resident Indian, the indemnity bond, and affidavit shall be notarised / apostilled or consularized.
  • Bank closure letter

Note:

  • A wait period of three months is required for a company that has changed its name or shifted its registered office from one state to another.
  • Overdue returns in the form AOC-4, (XBRL, if applicable) and MGT-7 must be filed before making an application for strike off.

LLP Strike Off Rules MCA

If an LLP is not conducting any business since its incorporation or for a period of one year or more, it can file an application in LLP Form 24 and urge ROC to strike off its name from the register.

   

Documents Required for LLP Strike Off

  • Application in LLP Form 24 with a fee of INR 500/-
  • Authority letter signed by each designated partner
  • Consent Letter by all partners
  • A Statement of Account certified by a Chartered Accountant disclosing Nil assets and Nil liabilities
  • An affidavit by the designated partners, either jointly or severally
  • Indemnity Bond by partners,  either jointly or severally
  • A copy of the acknowledgement of the latest Income-tax return filed
  • Initial and subsequent LLP agreements along with the payment challan as applicable
  • Declaration stating that there are no outstanding, pending litigation against the Designated Partners, Partners and the LLP Letter stating that the bank account has been closed
 

CHECKLIST FOR  for LLP Strike Off

  • Application in LLP Form 24
  • Authority letter signed by each designated partner
  • Consent Letter by all partners
  • A Statement of Account certified by a Chartered Accountant
  • An affidavit format for LLP strike off signed by the designated partners, either jointly or severally
  • Indemnity Bond by all partners
  • A copy of the acknowledgement of the latest Income-tax return filed
  • Initial LLP agreement along with the payment challan
  • Declaration stating that there are no outstanding, pending litigation against the Designated Partners, Partners and the LLP, and documents required for strike off LLP
  • Letter stating that the bank account has been closed
 

In conclusion, Strike Off is a helpful tool for business owners who want to remove their non-functioning companies’ names from the register. It is important to follow the eligibility criteria, and submit the required documents to ensure a successful Strike Off for both companies and LLPs.

Reference:

  • Section 248 of the Companies Act, 2013
  • Section 249 of the Companies Act, 2013
  • The Companies (Removal of Name of Companies from the Registrars of Companies) Rules, 2016
  • LLP Rules, 2009
  • LLP (Amendment) Rules, 2017, came into force wef 20/05/2017

FAQs about Strike Off

Q. How long does it take to strike off an LLP?

A. It usually takes 90 days to get approval for an LLP strike off from the Registrar of Companies (ROC).

Q. Can an LLP be struck off without annual filing?

A. No, LLP needs to file a statement of accounts and annual returns with the ROC regularly to avoid any complications while striking off the LLP.

Q. Can a Company be struck off without annual filing?

A. No, a Company needs to file its statement of accounts and annual returns up to the end of the financial year in which the LLP ceased to carry on its business or commercial operations with the ROC regularly to avoid any complications while striking off the Company.

Q. How much does it cost to strike off an LLP?

A. The fees for LLP form 24 is INR 500/-.

Q. How much does it cost to strike off a Company?

A. The fees for form STK-2 is INR 10,000/-.

Q. Can LLP strike off without filing LLP Form 3?

A. No, LLP has to file Form 3 (Information with regard to limited liability partnership agreement and changes, if any, made therein) and receive approval for the same before submitting application for strike off.

Q. Who can strike off a LLP?

A. The designated partners shall make an  application with the ROC on behalf of an LLP for Strike Off.

Q. What is the rule for strike off of LLP?

A. As per LLP rules, if an LLP has not carried out any business activity for the whole of the previous financial year, then it can be considered for strike off from the Register.

Q. Can LLP strike off within one year of incorporation?

A. No, LLP cannot apply for the striking off from the register within the first year of its incorporation.

Q. What is the form for LLP strike off?

A. The Form for LLP strike off is Form 24.

Q. What is the form for Company strike off?

A. The Form for Company strike off is Form STK-2.

Q. What are the documents required for LLP closure?

A. The documents required for LLP closure are –

  • Application in LLP Form 24 with a registration fee of INR 500/-
  • Authority letter signed by each designated partner
  • Consent Letter by all partners
  • A Statement of Account certified by a Chartered Accountant
  • An affidavit format for LLP strike off signed by the designated partners, either jointly or severally
  • Indemnity Bond by all partners,  either jointly or severally
  • A copy of the acknowledgement of the latest Income-tax return filed
  • Initial and subsequent LLP agreements along with the payment challan as applicable
  • Declaration stating that there are no outstanding, pending litigation against the Designated Partners, Partners and the LLP
  • Letter stating that the bank account has been closed

Q. What is the format of resolution for strike off a LLP?

A. The format of resolution for strike off a LLP should be in writing, duly signed by designated partners, and containing the reason for striking off.

Q. Can I strike off a LLP without filing accounts?

A. No, LLP must file all the pending returns, financial statements, and regulatory compliances before applying for strike off.

Q. Can I strike off a Company without filing accounts?

A. No, a Company must file all the pending returns, financial statements, and regulatory compliances before applying for strike off.

Q. Can an LLP be closed without filing Form 8?

A. No, Form 8 i.e Statement of Account and Solvency must be filed up to the end of financial year in which the LLP ceased to carry on its business or commercial operations, before applying for striking off.

   


Disclaimer:

The content of this article is for information purpose only and does not constitute advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer to relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up. The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that the Author / Treelife is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof.

Last Updated on: 7th December 2023, 01:33 pm


Disclaimer:

The content of this article is for information purpose only and does not constitute advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer to relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc. before acting on the basis of the above write up. The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that the Author / Treelife is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof.

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