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Striking off Name of Defunct LLP

Striking off Name of Defunct LLP

The dictionary meaning of ‘defunct’ is a state of being no longer existing or functioning. When a Limited Liability Partnership is said to defunct, it means it is no longer functioning or in operation. Section 75 of the Limited Liability Partnership Act, 2008 provides that where the Registrar has reasonable cause to believe that a LLP is not carrying on business or its operation, in accordance with the provisions of this Act, the name of limited liability partnership may be struck off the register of limited liability partnerships in such manner as may be prescribed.

Powers of Registrar on striking off name of defunct LLP  –

Rule 37 of the LLP Rules, where a limited liability partnership is not carrying on any business or operation –

(a) for a period of two years or more and the Registrar has reasonable cause to believe the same, for the purpose of taking suo motu action for striking off the name of the LLP; or

(b) for a period of one year or more and has made an application in Form 24 to the Registrar, with the consent of all partners of the limited liability partnership for striking off its name from the register,

The Registrar shall send a notice to the limited liability partnership and all its partners, of his intention to strike off the name of the limited liability partnership from the register and requesting them to send their representations along with copies of the relevant documents, if any, within a period of one month from the date of the notice.

Registrar shall give an opportunity to the LLP before striking off name of defunct LLP –

The Registrar shall, before striking off the name of defunct LLP, give such limited liability partnership a reasonable opportunity of being heard. However, if the application is made by the LLP in Form 24, there is no need to give such opportunity by the Registrar to the LLP and its partners. Where the limited liability partnership is regulated under a special law, the application for removal of its name shall be accompanied by approval of the regulatory body constituted or established under that law.

Notice of the Registrar shall be placed on the website of MCA –

A notice issued under Section 37(1) or contents of an application made by the LLP shall also be placed on the website of the Ministry of Corporate Affairs for the information of the general public for a period of one month.

Registrar to strike off name of defunct LLP on his satisfaction –

At the expiry of the one month time mentioned in the notice, the Registrar may, by an order, unless cause to the contrary is shown by the limited liability partnership, or the Registrar is satisfied that the name should not be struck off from the register, strike its name off the register, and shall publish notice thereof in the Official Gazette, and on the publication in the Official Gazette of this notice, the limited liability partnership shall stand dissolved.

Registrar must satisfy that necessary provisions has been made for realization of all amounts due to the LLP –

Rule 37(4) provides that the Registrar, before passing an order under sub-rule (3), shall satisfy himself that sufficient provision has been made for the realization of all amount due to the limited liability partnership and for the payment or discharge of its liabilities and obligations by the limited liability partnership within a reasonable time. If necessary the Registrar shall obtain necessary undertakings from the designated partner or partner or other persons in charge of the management of the limited liability partnership.

Even if the necessary undertakings has been obtained from partners or designated partners or other persons in charge of the management of the LLP, the assets of the limited liability partnership shall be made available for the payment or discharge of all its liabilities and obligations even after the date of the order removing the name of the limited liability partnership from the register.

Designated partners have continuing liability for the LLP –

Rule 37 (5) provides that the liability, if any, of every designated partner of the limited liability partnership dissolved under sub-rule (3), shall continue and may be enforced as if the limited liability partnership had not been dissolved.

Nothing in this rule shall affect the power of the Tribunal to wind up a limited liability partnership the name of which has been struck off the register.

Striking off Name of Defunct LLP

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