Striking off Defunct LLP

The generic meaning of the word 'defunct' is a state of being non-existing and dysfunctioning. A Limited Liability Partnership is said to be defunct when it is no longer in business for more than one year. According to Section 75 of the Limited Liability Partnership Act, 2008 it states that the Registrar has rational cause to declare an LLP (not carrying on business or its operation) as defunct. Based on the provision of the Act, the name of the LLP may be struck off the register.

However, the Registrar doesn't take the decision without informing them, they at first send a notice to the LLP and all its partners stating the intention of striking off the name from the register. Within a period of one month as the deadline, the LLP is requested to send in their explanation along with copies of the relevant documents(if any).

Is anyone liable after the striking off the defunct LLP?

Yes, certainly the Designated partners are responsible for continuing liability for the LLP as mentioned in Rule 37 (5). Under this rule it states that the liability, if any, of every designated partner of an LLP dissolved under sub-rule (3), must continue and shall be enforced as if the limited liability partnership is not dissolved. The authority of the Tribunal to wind up a limited liability partnership, whose name has been struck off the register, remains unaffected under this rule.

  • Before striking off the name of the dysfunctioning LLP, the Registrar shall give such an LLP a reasonable chance of being heard. In case the LLP files an application in Form 24, there is no need for the registrar to give the opportunity. If the limited liability partnership is regulated under a special law, the application for elimination of its name is accompanied by permission of the regulatory body created under that law.
  • The Notification of the Registrar is to be placed on the MCA Website– A notice circulated under Section 37(1) or the content of an application drafted by the LLP is also placed on the website of the Ministry of Corporate Affairs. This is to inform the general public for one month about the removal of the LLP.
  • After the Completion of the time-frame given, if there are no adverse representations from the LLP partners or the general public, then the register is permitted to strike off the name of the LLP from the registry and also publish a notice about the same in an official Gazette. As soon as the notice is published in the Gazette the LLP is dissolved.

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