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Declaring the LLP as Defunct

This is the most easy & shortest method for dissolving of any LLP. Where the LLP is not carrying any business or operation or it has discontinued the operations completely, than it can make any application to the Registrar of LLP for declaring it as defunct LLP. After being declared as defunct, the name of the LLP is removed from the records of the Registrar of LLP.

Though declaring a LLP as defunct is the suo moto, power of the Registrar of LLP, the Government of India from time to time issues necessary exit scheme, whereby non operational companies can apply to the Registrar of Companies for striking their names. Currently, a company can apply under Simplified Exit Scheme 2005 for striking off their name.

Striking off the name of the LLP does not materially affect its creditors because

1. 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
2. Liability of the Designated Partners subsists even after dissolution of LLP for payment of any legal dues to its creditors and other persons as if the LLP has not been dissolved

Declaring the LLP as defunct is much easier process to close down the LLP as compared to wounding up because it does not involves high formalities and due to simplified procedure, the time consumed is also comparatively very less.

Process to be followed:

1. Consent of Partners: The proposal to declare the LLP as defunct shall be approved by all the partners.
2. Application to Registrar of LLP: An application in prescribed form shall be made to the Registrar of LLP for Striking off the name of the LLP along with prescribed fees. The application shall be supported by following documents:
1. An Indemnity Bonds to indemnify any person legally claiming after the LLP to be striked off and duly sworn Affidavits declaring all the information provided and statements given to be true, from all partners.
2. Approvals or No Objection Certificates from concerned Regulatory Authorities with which the LLP is registered. For eg. LLP engaged in or registered with RBI for Banking Business has to obtain NOC from RBI before winding up of its affairs.
3. Publication of notice: The Registrar shall publish a notice on its website as to the content of the application for a period of one month for the notice of the general public.
4. Undertaking from LLP: The Registrar, where he has sufficient cause to believe that the limited liability partnership has any asset or liability, 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 and, if necessary, obtain necessary undertakings from the designated partner or partner or other persons in charge of the management of the limited liability partnership
5. Order for declaring LLP as defunct: On the expiry of period of one month, the Registrar may, by an order, unless cause to the contrary is shown by the limited liability partnership, 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.

	Point to be noted:
1.	There should have been no liability existing or obligation subsisted on part of LLP and its partners
2.	There should be no litigation pending for or against LLP.
3.	The LLP should have done its annual fillings with the Registrar of LLP.

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