STRIKING OFF OF LLP

STRIKING OFF OF LLP

An LLP that has stopped doing business does not disappear by default. To legally exit the MCA register in FY 2026-27, designated partners must clear every pending annual filing, surrender GST registration, close all bank accounts, and submit Form 24 on the MCA V3 portal with a CA-certified statement of accounts and individual partner affidavits. Skipping any single step keeps late fees running at Rs. 100 per form per day — with no cap — and leaves partners personally exposed to surviving tax demands long after the LLP vanishes from the register. This guide gives you the exact sequence.

The Legal Foundation: Rule 37 and Section 75

Striking off an LLP rests on two pillars:

Rule 37 of the LLP Rules, 2009 provides the procedural framework for both voluntary applications by designated partners and suo motu (self-initiated) action by the Registrar of Companies (ROC).

Section 75 of the LLP Act, 2008 is the substantive provision that empowers the ROC to remove defunct LLPs from the register.

Together they create two distinct exit routes:

1. Voluntary strike-off — designated partners proactively apply using Form 24 on the MCA V3 portal after satisfying a defined eligibility ladder.
2. Suo motu strike-off — the ROC initiates removal when an LLP has not commenced business within one year of incorporation, or has been continuously inactive for two consecutive financial years.

Since MCA V3 became fully operational for LLP filings, Form 24 is validated in real time before it reaches the Registrar's desk. Incomplete bundles are rejected at the portal gate, raising the quality bar considerably compared to the earlier V2 regime. Understanding what the portal expects — and in what order — saves you the cost and frustration of a returned application.

The Eligibility Ladder: Six Conditions That Must All Be Met

The ROC will not consider a Form 24 application unless every one of the six conditions below is satisfied simultaneously on the date of filing. A single unchecked box means rejection.

1. Commercial activity has ceased for at least one year The LLP must have stopped all trading, service, or commercial activity for a minimum of twelve consecutive months before the application date. Even a residual invoice collection during this window can be treated as activity. Document clearly why any such receipt does not constitute resumption of business.

2. All bank accounts are formally closed Every current or savings account in the LLP's name must be closed and a written bank closure certificate obtained. Do not confuse "zero balance" with "closed." A nil-balance account is still an active account in the bank's records and will invalidate your affidavit.

3. All pending Form 8 and Form 11 filings are cleared

• Form 11 — Annual Return: due within 60 days of the close of each financial year, i.e., by 30 May each year.
• Form 8 — Statement of Account and Solvency: due within 30 days from the end of the first six months of each financial year, i.e., by 30 October each year.

Every financial year since incorporation requires a filed return, even if the LLP had nil transactions. Inactivity is not a filing exemption. If the LLP genuinely had zero operations, NIL statements can be submitted — but they must be submitted.

4. No pending litigation, prosecution, or regulatory proceeding A single active proceeding — income-tax assessment, GST audit notice, civil dispute, or consumer forum complaint — blocks eligibility. Resolve, settle, or obtain a stay before applying.

5. Tax dues cleared and registrations surrendered GST registration must be cancelled through Form GST REG-16 and the final return GSTR-10 must be filed within three months of the cancellation date. TDS obligations — returns, payments, and Form 16A issuance — must be current. Outstanding income-tax demand notices must be settled or have an appeal with a stay in place.

6. Unanimous partner consent Every partner — not just designated partners — must sign the resolution to close the LLP and execute individual affidavits and indemnity bonds. A missing signature from even a silent or sleeping partner invalidates the application.

Suo Motu vs. Voluntary Strike-Off: Which Route Applies to You?

These routes sound similar but differ materially in who controls the timeline and what the liability record shows.

Suo Motu Route (ROC-Initiated)

The ROC issues a notice in Form 23 when it identifies an LLP that has not filed any returns for two consecutive years or has not commenced business within one year of incorporation. The notice invites objections within 30 days. If no objection is received, the ROC publishes the strike-off in the Official Gazette.

The problem: you have no control over the final accounts on record, the affidavits, or the indemnity documentation. Whatever is in the MCA database at the point of removal becomes the permanent record, leaving ambiguity about unresolved liabilities — and partners exposed to personal claims for years afterward.

Voluntary Route (Form 24)

You approach the ROC before it approaches you. You control the timing of the CA-certified accounts, you choose what the affidavits state, and you confirm in writing that all liabilities are settled. This contemporaneous paper trail shifts the burden of proof to anyone later asserting a post-closure claim against the partners.

Practical rule: Always prefer the voluntary route. If the ROC has already issued a Form 23 notice, respond within the 30-day objection window and use that response to propose conversion to a voluntary Form 24 application.

Documents Required with Form 24 on MCA V3

Prepare these documents in the sequence listed. The MCA V3 portal's real-time validator checks document type against upload metadata; out-of-sequence or mislabelled attachments cause immediate rejection.

1. Affidavit from each designated partner — sworn individually (not a joint affidavit), stating the LLP has ceased operations and carries no outstanding liabilities.
2. Indemnity bond — executed individually by each designated partner, indemnifying the ROC and any future creditor against unresolved claims.
3. CA-certified statement of accounts — certified by a practising Chartered Accountant, dated not more than 30 days before the Form 24 filing date, showing nil assets, nil liabilities, and zero bank balance.
4. Consent of all partners — a signed resolution from a partners' meeting authorising the designated partners to apply for strike-off.
5. Latest ITR acknowledgement — if the LLP has ever filed income-tax returns, the most recent ITR-5 acknowledgement must be attached. If the LLP never had income and filed no returns, state this explicitly in the affidavit.
6. GST cancellation order — a copy of the GSTN portal's approval of Form GST REG-16 or the cancellation order.
7. Bank closure certificates — one per closed account, issued by the respective bank branch.
8. No-Objection Certificate (NOC) from regulatory bodies — required where the LLP held a sector-specific licence (FSSAI, drug licence, NBFC registration) or had borrowings from a bank or financial institution.

The Digital Signature Certificate (DSC) of both designated partners is mandatory. A single-DSC submission is automatically rejected at the portal gate without explanation.

Step-by-Step Procedure on the MCA V3 Portal in 2026

Follow these steps in the order shown. Reordering them — particularly filing Form 24 before clearing outstanding annual returns — is the most common cause of defect notices.

1. Hold a formal partners' meeting. Pass a resolution recording the decision to cease operations, close accounts, and apply for strike-off. Note the date, partner names, and DPIN (Designated Partner Identification Number) in the minutes.

1. Settle all liabilities. Pay off every creditor. Repay partners' capital and close any inter-partner loans. Collect no-dues letters from lenders.

1. Surrender GST registration. First, file all outstanding GSTR-1 and GSTR-3B returns. Then submit Form GST REG-16 on the GST portal citing "Discontinuance of business." After receiving the cancellation order, file GSTR-10 (Final Return) within three months. Late filing of GSTR-10 attracts a daily late fee as notified under the CGST Act, subject to a prescribed cap.

1. File the final income-tax return. For FY 2025-26 (AY 2026-27), file ITR-5 for the LLP. Even if income is nil, the return must be filed. Before filing, check the Annual Information Statement (AIS) and Tax Information Summary (TIS) on the Income Tax portal (www.incometax.gov.in) for any unreported credits — bank interest, TDS from clients — that might trigger a scrutiny notice later.

1. Close TDS obligations. File all pending TDS returns (Form 24Q for salary TDS, Form 26Q for non-salary TDS), pay outstanding TDS along with applicable interest, and issue any pending Form 16 / Form 16A certificates to deductees.

1. Close all bank accounts. Obtain a formal written closure certificate from each bank. Confirm the closure date is recorded.

1. File every pending Form 8 and Form 11. Submit outstanding returns on the MCA V3 portal, paying applicable late fees. Wait until MCA confirms each SRN (Service Request Number) as Approved before proceeding. Simultaneous filing of outstanding returns and Form 24 risks the validator treating the pending returns as still outstanding.

1. Commission the CA-certified statement of accounts. Engage a practising Chartered Accountant to prepare and certify accounts showing nil assets, nil liabilities. Schedule this step last, because the 30-day currency clock starts from the certification date. Getting accounts certified in January and filing Form 24 in March leaves the accounts stale.

1. Prepare and notarise affidavits and indemnity bonds. Each designated partner must execute these before a Notary Public or Oath Commissioner. Partners outside India must notarise before the Indian Consulate and have documents apostilled — allow two to four weeks for this.

1. Submit Form 24 on MCA V3. Log in at www.mca.gov.in, navigate to LLP filings, select Form 24, enter the LLPIN, confirm Active status, attach all documents in the prescribed order, and affix the DSC of both designated partners.

1. Track and respond. After submission, the form enters ROC review. Respond to any Registrar clarification within the prescribed window — typically 30 days from the notice date. Monitor the LLP master data on MCA V3 until the status changes to "Strike-Off" and gazette publication is confirmed.

Tax and GST Closure: The Sequence That Prevents Post-Closure Demands

The most dangerous assumption in an LLP strike-off is that the Form 24 submission automatically neutralises pending tax exposure. It does not. Tax authorities can — and do — complete assessments and enforce demands against partners personally after an LLP is struck off.

GST closure must be sequenced correctly:

• File every outstanding GSTR-1 and GSTR-3B first.
• Submit Form GST REG-16. Do not file it while a return is still pending; the portal may reject the cancellation request.
• After cancellation, file GSTR-10 within three months. Reverse any remaining Input Tax Credit (ITC) balance on the cancellation date. Unreversed ITC becomes a demand.

Income-tax closure: check the AIS before filing ITR-5. The AIS and TIS on the Income Tax portal aggregate information from banks, GST, property registrars, and other sources. A dormant LLP may have unreported bank interest or unclaimed TDS credits sitting in these statements. If the final ITR-5 does not reconcile with the AIS, the return may be flagged for scrutiny after the LLP is struck off — and the demand will land on the designated partners.

Partner liability under the LLP Act and tax statutes survives strike-off:

• Section 167C of the Income-tax Act, 1961 makes partners jointly and severally liable for the tax dues of a dissolved firm. This provision does not disappear upon strike-off.
• Section 90 of the CGST Act, 2017 similarly holds partners liable for unpaid GST of an LLP.
• Criminal prosecutions under the Negotiable Instruments Act or the Income-tax Act survive the strike-off entirely.

The only effective defence is a clean, documented exit: zero-liability affidavits, closed bank accounts, settled tax records, and the Form 24 approval on file.

Worked Example: What a Delayed Strike-Off Actually Costs

Consider Sunrise Consulting LLP, a two-partner LLP incorporated in April 2022. The partners stopped operations in December 2022 but filed no annual returns. In May 2026, they finally decide to apply for voluntary strike-off.

Outstanding late fees as of 23 May 2026:

This figure is entirely a cost of delay. Had Sunrise Consulting LLP filed for strike-off in January 2023 — one month after stopping operations — only the Form 11 for FY 2022-23 would have been approaching its due date. The filing cost at that point: near zero. At the May 2026 point: Rs. 3,88,100 in MCA late fees alone, before GST late fees, income-tax interest, or professional fees.

The compounding arithmetic: Two pending forms × Rs. 100 per form per day = Rs. 200 per day = Rs. 6,000 per month, every month, with no ceiling. Partners of dormant LLPs who assume the meter stops when they stop operations are building a liability with each passing month.

Common Mistakes That Get Form 24 Applications Rejected

The MCA V3 validator catches document-level errors; the Registrar catches substantive ones. Here are the recurring failure patterns.

1. CA-certified accounts are more than 30 days old at the time of filing. The certification date of the statement of accounts must fall within 30 days of the Form 24 submission date. A common error: accounts certified in January, application filed in March. The accounts are stale. The application is returned with a defect notice and the 30-day window starts over.

2. Bank accounts are "zero-balance" rather than "closed." Partners often interpret a nil-balance statement as sufficient. It is not. Each account requires a formal closure certificate from the bank, explicitly stating the account is closed. The affidavit must use the word "closed," not "dormant" or "inactive."

3. GST registration still shows Active on the GSTN portal. The affidavit declares all registrations surrendered. If the GSTN portal still reflects Active status on the filing date — because the cancellation order is pending — the affidavit is factually incorrect. This can result in rejection or, worse, a post-approval challenge.

4. One designated partner's DSC has expired. DSC validity is typically two or three years. Check the expiry date of both partners' DSCs at least two weeks before the planned filing date. Renewing a DSC takes 24-48 hours but delays the entire timeline if discovered late.

5. A partner is overseas and has not arranged for apostilled notarisation. Affidavits executed outside India must be notarised before the Indian Consulate or an authorised local Notary and then apostilled. Apostille processes in several jurisdictions take two to four weeks. Identify this requirement early and factor the time into your project plan.

6. Outstanding filings submitted simultaneously with Form 24. MCA V3 processes forms sequentially. If overdue Form 8 and Form 11 submissions are filed at the same time as Form 24, the system may not register the annual returns as "Approved" before it validates Form 24's eligibility. Always confirm SRN Approved status for all pending returns before submitting Form 24.

7. Pending litigation or tax assessments not disclosed in the affidavit. Applicants sometimes omit a consumer forum complaint or a pending income-tax scrutiny assessment because it seems minor. Any unresolved proceeding — however small — must be disclosed. Material non-disclosure makes the strike-off liable to be set aside by the NCLT if a creditor applies for restoration.

Partner Liability After Strike-Off: What Survives the Gazette Notification

The strike-off gazette notification is not a clean-slate certificate. Partners — particularly designated partners — carry specific residual exposures that do not extinguish on the date the LLP is removed from the register.

Tax assessments in progress continue. If an income-tax assessment is underway at the date of strike-off, the assessing officer can complete it, raise a demand, and enforce collection personally on the designated partners under Section 167C of the Income-tax Act, 1961. The fact that the LLP no longer exists as a legal entity is not a defence to the tax demand.

New assessments can be opened within the limitation period. The income-tax department can open a scrutiny assessment for prior financial years within the applicable limitation period, even after strike-off. If the LLP underreported income in, say, FY 2023-24, the period for assessment does not close automatically because the LLP was struck off.

GST demands are enforceable on partners. Section 90 of the CGST Act, 2017 provides that partners of a firm (which includes an LLP) are jointly and severally liable for the tax, interest, and penalty due from the firm. This provision survives dissolution.

Criminal liability is personal. A prosecution under Section 138 of the Negotiable Instruments Act, a prosecution for wilful default under the Income-tax Act, or any other criminal proceeding commenced against a partner as an individual or as a designated partner is unaffected by the LLP's strike-off.

Restoration by the NCLT is possible. Under the LLP Act, if a creditor or aggrieved party demonstrates that the LLP was struck off with unresolved claims, the National Company Law Tribunal (NCLT) can order restoration of the LLP to the register. At that point, partners face winding-up proceedings — a significantly more disruptive and expensive outcome than a clean voluntary exit.

Disqualification risk for persistent non-filers. Designated partners whose LLPs are compulsorily struck off due to filing defaults may face restrictions on holding directorship or designated partner positions in other entities, as MCA increasingly links DIN (Director Identification Number) and DPIN (Designated Partner Identification Number) compliance records. Filing proactively, before the ROC initiates suo motu action, materially reduces this risk.

Key Takeaways

• Voluntary Form 24 always beats waiting for suo motu. You control the affidavit content, the accounts, and the liability record. Do not let the ROC's Form 23 notice be your first prompt to act.
• All six eligibility conditions must be satisfied simultaneously. Ceased activity, formally closed bank accounts, annual filings current, no litigation, tax dues nil, unanimous partner consent — one gap means rejection.
• Late fees compound daily with no ceiling. At Rs. 100 per form per day, a two-form default over three financial years generates over Rs. 3.8 lakh in MCA late fees alone, as the Sunrise Consulting LLP example demonstrates.
• Get the CA-certified accounts certified last, not first. The 30-day currency window starts on the certification date. Commission the statement of accounts only after all other pre-filing steps are complete.
• GST and income-tax closure must precede Form 24 submission. File GSTR-10 within three months of GST cancellation. Reconcile the final ITR-5 with AIS/TIS before submitting it.
• Strike-off does not extinguish pending tax assessments, GST demands, or criminal liability. Designated partners remain personally exposed for the relevant limitation periods. A clean, documented exit with zero-liability affidavits is the only practical protection.
• Check both designated partners' DSC validity, notarisation requirements, and GST portal status at least two weeks before filing. Logistical delays — expired DSC, overseas partner, pending GST cancellation — are the most common reasons for a last-minute collapse of an otherwise well-prepared application.