Company/LLP Strike Off
After establishing a business and incorporating the company, if it becomes non-operational, closing the office or shop isn’t enough. Entrepreneurs must apply for a Company Strike Off to formally dissolve the business. This process removes the company from the registrar, freeing the owner from annual compliance obligations. Section 248 of The Companies Act 2013 governs the provisions for striking off a company.
LLP stands for Limited Liability Partnership, a business entity where partners enjoy limited liability for the company’s obligations. Similar to a private limited company or corporation, an LLP is a distinct legal entity capable of entering contracts and acquiring assets. LLP registration is renowned for its flexible partnership structure and the advantages it offers, combining the benefits of partnerships with those of a company.
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Type of Company Strike Off
#1. Voluntary Strike Off by the Company: As a business owner with a Private Limited Company Registration, if you decide to close your business voluntarily, you must apply for Company Strike Off. This involves submitting an application form to the Registrar of Companies (ROC) and tax authorities. Additionally, shareholder approval is required before initiating the Company Strike Off process.
#2. Strike Off by the Registrar of Companies: The Registrar of Companies has the authority to strike off a company under certain circumstances, including:
Failure to engage in business or commence operations within one year of Company Incorporation.
Inactivity for two consecutive financial years without filing for dormant company status.
Non-filing of Form INC 20A within 180 days, along with non-payment of subscriptions declared during company incorporation.
Failure to conduct business at the registered office address after physical verification by the ROC.
Eligibility for Company Strike Off through Fast Track Exit [FTE] Mode
#1. Time Limit for Existence: An application for company strike off under the Fast Track Exit (FTE) scheme can only be made if the company has been in existence for at least one year. In other words, it is not possible to apply for Company Strike Off within the first year of incorporation.
#2. Absence of Business Activity: The company must demonstrate a lack of business transactions or revenue generation within the preceding 1-2 years.
#3. Compliance Requirements: To be eligible for company strike off, the company must fulfill all compliance obligations related to the strike off procedure. This includes submitting Form AOC 4 (Financial Statement) and Form MGT 7 (Annual Return). For comprehensive compliance details, it is advisable to seek guidance from a chartered accountant (CA) online.
Understand the Company Strike Off Procedure
#1. Conduct Board Meeting: The Board of Directors convenes a meeting to approve key decisions, including:
Approval for Company Strike Off.
Authorization for the Director to submit the Strike Off application to the Registrar of Companies (ROC).
Issuance of a notice for holding a General Meeting.
#2. Settlement of Liabilities: Prior to closure, all outstanding liabilities of the company must be settled. Any remaining debts are discharged, and the Creditor Account should be cleared. A practicing Chartered Accountant (CA) must verify and sign the closure account.
#3. Hold a General Meeting: The company convenes a general meeting of shareholders to pass a resolution for removing the company’s name from the registrar of companies. The strike off resolution requires a minimum of 75% support from shareholders, based on the paid-up share capital.
#4. Submission of Documents and Forms: Following the general meeting, the company is required to file E-form MGT-14 within thirty days. Additionally, necessary documents, the Fast Track Exit (FTE) Form, and E-form STK-2 are submitted to the ROC for striking off the company. The company must also obtain a Certified True Copy (CTC) of the Special Resolution and No Objection Certificates (NOC) from relevant government departments.
When I can not Strike Off the Company?
#1. If the registered office has been relocated within the preceding three months.
#2. If the company name was changed within the previous three months.
#3. If, just before ceasing trade or business, the company made significant disposals of property or rights as part of its regular operations.
#4. If the company engaged in any activities beyond those necessary for filing a strike off application, winding up its affairs, or meeting legal obligations.
#5. If a Tribunal has been approached to approve a Compromise or Agreement, but no decision has been reached yet.
#6. If the company is undergoing liquidation under Chapter XX, whether voluntarily, by order of the Tribunal, or under the Insolvency and Bankruptcy Code, 2016.
#7. If there are outstanding government liabilities such as Income Tax and GST.
#8. If all directors disagree regarding the company strike off, or if any director is absconding.
#9. If at least 75% of the shareholders have not consented to the company strike-off.
Timeline for Company Strike Off
Timeline for Company Strike Off depends on a number of factors. Hence, it’s best to consult our experts to understand the complete timeline for company strike off in your case.
Document Requirement to Strike Off Company
What is Company Strike Off Certificate?
The Company Strike Off Certificate serves as legal confirmation that you have successfully completed the company strike off procedure, officially closing your company’s operations. Issued by the Jurisdictional Registrar of Companies, this certificate is a vital document validating the closure of your company.
What happens if I discontinue business without completing the company strike off process?
Every active company is obligated to fulfill annual ROC compliance requirements, undergo statutory audits, conduct quarterly board meetings, hold at least one shareholder general meeting, appoint an auditor, file income tax returns, and more. Continuous non-compliance with these obligations may result in the company and its directors facing penalties and legal consequences.
Failure to initiate the company strike off procedure can lead to liability for penalties and punishments for the company, its directors, managers, or other officers with management powers, due to non-compliance and evasion of obligations.
Additionally, directors found in default may be barred from assuming directorship in other companies or starting new companies.
Therefore, completing the company strike off procedure is mandatory when discontinuing business operations.
How can Shlok Tax Wala assist you?
We can simplify the Company Strike Off process for you by reviewing your company’s business activities and assessing its eligibility under the Companies Act, 2013 & Fast Track System.
Our team of professional experts will handle the preparation of your application and complete all necessary paperwork on your behalf. Once everything is in order, we will submit the application for closure of your company to the ROC.
Upon successful approval of the Company Strike Off application, we will promptly deliver your Company Strike Off Certificate directly to your email for your convenience.
Frequently Asked Questions
It is unlawful for a company to engage in any trading activities once it has been struck off from the Registrar of Companies (ROC). Upon being struck off, a business loses its legal capacity to conduct transactions, sell assets, or fulfill financial obligations. Furthermore, it forfeits the right to conduct any form of commercial operations. Subsequently, new ventures may adopt the company’s name without constraint.
The process of Company Strike Off can only be initiated when all directors are in agreement. If any director opposes the strike off, the company becomes ineligible for this procedure.
Following the publication of the ROC’s intention to strike off the company’s name in the official gazette, there exists a twenty-year window for individuals who believe they have been wronged to seek redress through legal channels.
A company can undergo strike off proceedings one year post-incorporation, even in the absence of annual filings mandated for an active Director Identification Number (DIN) and without any commercial activities during that period.
Certainly, we do. As an online platform catering to clients across India, Shlok Tax wala provides its services nationwide. Whether you operate from a mobile device or desktop, our services are accessible from any part of the country.
No, physical presence is unnecessary for the Company Strike Off Procedure. You can liaise with our experts via phone, email, or chat, and securely submit your documents through our web portal or email.
Feel free to contact our experts at +91 9650716271 or email us at shloktaxwala@gmail.com. Our team is dedicated to assisting you and resolving all your queries promptly.
About LLP Strike Off
LLP Strike Off is an obligatory online process required when closing down a business that has been registered as an LLP for a period exceeding one year.
Additionally, it’s mandatory to initiate the LLP Strike Off through an application procedure if your startup or company registered as an LLP is not engaged in any business activities post-incorporation.
Eligibility for applying for Strike Off of LLP Company
#1. The LLP Company is deemed inactive from the date of its incorporation.
#2. The LLP Company remains inactive for a period exceeding one year.
#3. Closure of the current account associated with the LLP.
#4. The LLP Company obtains consent or a No Objection Certificate (NOC) from various parties including government agencies, creditors, and other partners within the company.
What are the consequences of not applying for LLP Strike Off even after business shutdown?
Failure to apply for LLP Strike Off despite business inactivity or closure will result in continued LLP compliances. These compliances are mandatory even if the company has zero transactions. Non-compliance incurs substantial penalties, underscoring the importance of applying for LLP Strike Off.
Moreover, the costs associated with statutory and annual compliances for LLP are higher compared to the LLP Strike Off procedure. Hence, opting for LLP Strike Off is not only advantageous but also the most prudent decision.
Methods to Apply for LLP Strike Off
#1. Declaring LLP as Defunct or Non-Functioning: If your LLP Company has been inactive for a year or more, or if you intend to cease its operations, you can declare the LLP as defunct or non-functioning to initiate the LLP Strike Off process. Submitting an application form indicating the LLP’s defunct status notifies the registrar to remove its name from the Registrar of Companies (RoC).
#2. Winding up LLP: Winding up an LLP involves liquidating its assets to settle debts, with any remaining funds distributed among the owners, if applicable. This process can occur through voluntary winding up or mandatory winding up, providing two avenues for concluding the affairs of the LLP.
Formalities Before Applying for LLP Strike Off:
#1. Cease Commercial Activities.
#2. Close Current Bank Accounts.
#3. Prepare Affidavits & Declarations.
#4. Compile and Submit Documents in the prescribed format.
#5. Obtain a Certificate from a Chartered Accountant (CA) affirming no outstanding assets or liabilities.
#6. Submit LLP Form 24.
Document Requirements for LLP Strike Off Application:
#1. Recent certified account statement by a practicing Chartered Accountant, not older than 30 days from the filing date of Form 24.
#2. Copy of the latest Income Tax Return acknowledgment.
#3. Copy of the original LLP agreement.
#4. Affidavit confirming proper signatures of specified parties.
#5. Copy of the application detailing LLP particulars and grounds for closure.
#6. Application duly signed by all LLP partners.
Stepwise Procedure for striking off of LLP
#1. Consultation with our Experts Reach out to us for a free consultation via call at 91 9650716271 or email us at shloktaxwala@gmail.com
#2: Document Preparation and Submission Prepare and submit the necessary documents for the LLP Strike Off application.
#3: Verification and Application Submission Our experts will verify all documents and prepare the application form for LLP Strike Off. Subsequently, we will apply on the official government portal.
#4: Acknowledgement Delivery Upon successful verification by government authorities, we will send the acknowledgment to your email.
Why choose Shlok Tax Wala as Service Provider for Striking off your LLP?
Shlok Tax Wala’s team comprises highly skilled professionals, including Chartered Accountants (CA), Company Secretaries (CS), Lawyers, and business administrators. Shlok Tax Wala provides comprehensive solutions for LLP strike-off procedures. In addition to these services, we offer startup consulting, secretarial compliance services, PAN and TAN registrations, DIN registrations, GST registration, Trademark registration, Income Tax return filing, and more. Our process is straightforward and transparent, ensuring top-notch service quality throughout your association with Shlok Tax Wala.
Frequently Asked Questions
LLPs that fall under the following categories are ineligible for Strike Off:
- Listed and Vanishing Companies.
- Companies with outstanding compliances.
- LLP Companies under investigation or inspection.
- Companies that haven’t responded to notices.
- Companies facing pending prosecution cases.
- Companies seeking compounding of offenses.
- Companies with outstanding public deposits.
- LLPs with unpaid charges.
- Companies registered under Section 25 or Section 8 of the Companies Act, 1956.
Even after removal from the Register, LLPs indemnify themselves from liabilities. Thus, promoters or directors are released from compliance obligations and the risk of non-compliance as the LLP ceases to exist.
The timeline for LLP Strike Off varies based on several factors. Consult our experts at 8881-069-069 to determine the duration for striking off your LLP Company.
E-Form 24 is used to request the Registrar of Companies to strike off the LLP’s name. In essence, E-Form 24 serves as an application form for LLP Strike Off.
Yes, a Chartered Accountant (CA) is required for LLP Strike Off. An account statement or certificate endorsed by a CA is mandatory for the LLP Strike Off application.
Yes, LLP Strike Off can be conducted online. Simply connect with our experts via mobile or desktop with an internet connection, and they will guide you through the LLP Strike Off procedure.