Welcome to Ahuja & Ahuja Chartered Accountants, your trusted partners for all your accounting needs. We understand that every business has a lifecycle, and sometimes, it becomes necessary to close down the business for various reasons. This is where our expertise comes in to help you with the process of company strike off and LLP closure.
Company Strike Off and LLP Closure Process
Company strike off and LLP closure are processes through which a company or LLP can be dissolved and its name can be removed from the registrar’s records. This process can be initiated by the registrar of companies or the company itself.
The Registrar of Companies (ROC) can initiate this process on any of the below-mentioned grounds:
- The company has failed to start its business within a year of its incorporation.
- The company has not been carrying its operations since the preceding two financial years and has not yet applied for the status of a dormant company.
- On physical verification, he finds that the company is not carrying any business.
- The subscribers to the company’s memorandum have not paid the subscription money, and a declaration regarding the commencement of business is not filed within 180 days of the company’s incorporation.
If the ROC believes that any ground mentioned above is present, he may send a notice to the company and all its directors. The company is given thirty days period to reply to the notice. Reasons are presented by the company explaining why its name shouldn’t be struck off. If the representation satisfies the ROC, he stops the process; otherwise, he continues.
For the knowledge of the public about this process being initiated, ROC publishes a notice on the website and in newspapers too. The authorities regulating the subject company are also informed to raise objections if they have any.
Before striking off the name, the registrar makes a provision for realizing all the company’s debts. After considering all the objections received within the given time, the company’s name is removed from the register.
Company Strike Off and LLP Closure Form
For voluntary strike off, the company needs to apply to the ROC by filing Form STK-2. This form mandates the following attachments:
1: No objection certificate from the regulatory authority
2: Bond and affidavit signed by the directors
3: A statement of accounts in Form STK-8
4: Copy of special resolution passed at the EGM
The company also needs to prepare a statement of accounts and get it certified by a Chartered Accountant in Practice (not older than thirty days from the application’s date). The closure fee of Rs 10,000 needs to be paid.
Rule 37 of LLP Rules
LLPs can also be closed by following the LLP Rules. LLPs can be closed in the following ways:
- Winding-up: This is done when the LLP is unable to pay its debts or is not in a position to continue its business. The LLP needs to appoint a liquidator who will sell the assets and distribute the proceeds to the creditors and partners.
- Strike off: LLPs can apply for closure on the same grounds on which the ROC has the power to remove a company’s name from the register. LLPs need to file Form 24 and Form 24A with the Registrar of Companies, along with a statement of accounts, a consent letter from the partners, and the payment of all outstanding dues.
RESTORATION OF COMPANY’S NAME
The restoration of a company’s name involves reinstating a company’s name that has been struck off or removed from the Companies House Register. This process may be required when a company has failed to file its annual accounts or returns or when it has voluntarily applied for the removal of its name from the register.
FORMS INVOLVED IN THE PROCESS
The process of restoring a company’s name involves submitting certain forms and paying the appropriate fees to the Companies House. The forms that are involved in the process may vary depending on the reason for the company’s strike-off and whether or not the company is being restored within six years of its removal from the register.
Here are the forms that are typically involved in the restoration process:
- Form RT01: This form is used to apply for the restoration of a company that has been struck off the register due to the non-filing of its annual accounts or returns. The form must be completed and submitted to the Companies House, along with the relevant fee and any outstanding late filing penalties.
- Form RT02: This form is used to apply for the restoration of a company that has been struck off the register at the request of the company. This form must be completed and submitted to the Companies House, along with the relevant fee and any outstanding late filing penalties.
- Form NM01: This form is used to change a company’s name. If the company’s name was changed before it was struck off, this form may need to be completed as part of the restoration process.
- Form AD01: This form is used to update the company’s registered office address.
- Form SH01: This form is used to update the company’s share capital information.
In addition to these forms, the company may also need to provide additional documents, such as the company’s latest annual accounts, a statement of capital, and evidence of any outstanding debts.
Once the forms and documents have been submitted to the Companies House and the relevant fees have been paid, the company’s name will be restored to the register. The process typically takes several weeks, and the company will receive a confirmation letter from the Companies House once the restoration has been completed.
LLP Closure Process
Limited Liability Partnerships (LLPs) are business entities that are governed by the LLP Act, 2008. Just like any other business entity, an LLP may need to be closed due to various reasons such as the expiry of its term, insolvency, or any other reasons.
The LLP closure process can be initiated voluntarily by the partners of the LLP or it can be initiated by the Registrar of Companies. The process of closure involves various steps and formalities that need to be completed in a timely manner.
Here are the steps involved in the LLP closure process:
- Board Meeting: The first step in the LLP closure process is to conduct a board meeting. In this meeting, the partners of the LLP need to pass a resolution stating that they want to close the LLP.
- Consent of Partners: After the board meeting, the partners of the LLP need to give their consent to close the LLP. All partners must sign a consent form agreeing to the closure.
- Filing of Form 24: The next step is to file Form 24 with the Registrar of Companies. Form 24 is an application for striking off the name of the LLP from the Register of LLPs. This form must be filed within 30 days of passing the resolution for closure.
- Publication of Notice: After filing Form 24, a notice of the LLP closure must be published in a newspaper. The notice must be published in a newspaper that is circulated in the area where the registered office of the LLP is located. The notice must be published at least 30 days before filing Form 24 with the Registrar of Companies.
- Filing of Form 17: After the publication of the notice, the partners of the LLP must file Form 17 with the Registrar of Companies. Form 17 is a declaration of solvency that must be signed by all the partners of the LLP.
- Approval from Registrar of Companies: After filing Form 17, the Registrar of Companies will verify the documents and approve the LLP closure.
- Publication of Notice: After the approval from the Registrar of Companies, a notice of the LLP closure must be published in a newspaper. The notice must be published in a newspaper that is circulated in the area where the registered office of the LLP is located.
- Filing of Form 24A: The final step in the LLP closure process is to file Form 24A with the Registrar of Companies. Form 24A is an application for the closure of the LLP. This form must be filed within 14 days of the date of publication of the notice of LLP closure in the newspaper.
Once all these steps are completed, the Registrar of Companies will strike off the name of the LLP from the Register of LLPs. It is important to note that all outstanding fees, penalties, and taxes must be paid before initiating the LLP closure process. Failure to comply with the LLP closure process can result in penalties and legal consequences.
LLP Restoration refers to the process of reviving a Limited Liability Partnership (LLP) that has been struck off or dissolved by the Registrar of Companies (ROC). An LLP can be struck off by the ROC due to non-filing of Annual Returns and Statement of Accounts or for any other non-compliance with the provisions of the LLP Act.
LLP restoration allows the LLP to regain its legal status and continue its business activities. The LLP can apply for restoration within 20 years from the date of dissolution, and the process of restoration may vary depending on the circumstances of the case.
The process of LLP Restoration involves the following steps:
- Obtaining all the necessary documents and information: The LLP must obtain all the necessary documents, including the LLP Agreement, PAN Card, TAN, and other relevant documents.
- Application for restoration: The LLP must file an application with the ROC for restoration within 20 years of the dissolution date. The application must be made in the prescribed form, and it must be accompanied by the necessary fees and documents.
- Payment of outstanding dues: The LLP must clear all the outstanding dues, including the late filing fees, penalty, and other charges, to the ROC.
- Publication of notice: The ROC will publish a notice in the Official Gazette and on its website, informing the public about the application for restoration. The notice will provide an opportunity for any interested parties to object to the restoration.
- Hearing of objections: If any objections are raised, the ROC will conduct a hearing to consider the objections and decide on the restoration.
- Issuance of order: If the ROC is satisfied that the objections are unfounded, it will issue an order for the restoration of the LLP.
- Filing of necessary documents: Once the order for restoration is issued, the LLP must file all the necessary documents, including the Annual Returns and Statement of Accounts, with the ROC to ensure compliance with the provisions of the LLP Act.
Summary of Company Strike Off, LLP Closure & Restoration
Closing down a business is a critical process that requires expertise and experience. At Ahuja & Ahuja Chartered Accountants, we have been assisting businesses with their company strike off and LLP closure for over two decades. We provide end-to-end support, from preparing the necessary documents to liaising with the ROC or LLP authorities. If you are looking to close your business, we are here to help you through the process.
Is it possible to restore a company’s name after its strike-off?
Yes, the company or the ROC itself can apply for restoring a company’s name by appealing to the National Company Law Tribunal (NCLT).
How can a company apply for the status of a dormant company?
To obtain the status of a dormant company, a company needs to file Form MSC-1 with the ROC. To change the company’s status from dormant to active, form MSC-4 is filed.
Can a Section-8 company apply for its strike-off voluntarily?
No, a Section 8 company is restricted from applying for its strike-off voluntarily. The only way to remove the name of a Section-8 company from the register of companies is to convert it into a private company first and then proceed with the striking-off.
For how much time a company has to wait to apply for strike-off if it has changed its name?
A company that has changed its name in the last three months cannot apply for striking-off its name. Hence, it has to wait for a period of 3 months from the date of change in its name.
What is the fee for filing LLP Form 24 with the registrar for striking off the name of an LLP?
The government fee for filing LLP Form 24 is Rs 500.
Can an LLP apply for strike off without filing its pending forms?
No, filing all the pending forms is a prerequisite for striking off an LLP. The LLP must clear all the outstanding dues, including the late filing fees, penalty, and other charges, to the ROC before applying for strike off. The LLP must also file all the necessary documents, including the Annual Returns and Statement of Accounts, with the ROC to ensure compliance with the provisions of the LLP Act.