The abandoned LLP that quietly runs up a ₹1 lakh penalty while you're not looking
It is one of the most common — and most expensive — mistakes founders make. You register an LLP, the plan changes, you walk away, and you assume the dormant entity just quietly fades. It does not. A dead LLP still has to file its annual returns every single year, and the late fee for missing them runs at ₹100 per day, per form, with no upper cap. An ignored LLP silently accumulates penalties that can cross a lakh in a couple of years, and the designated partners are personally on the hook for it. The fix is to close the LLP properly. For a defunct LLP with nothing left on its books, that means striking it off under Rule 37 with Form 24. Here is how it works, and when you have to take the longer winding-up route instead.
Why you can't just walk away — the ₹100-a-day trap
Every LLP, however inactive, must file two annual forms: Form 11 (the annual return, under Section 35 of the LLP Act) and Form 8 (the statement of account and solvency, under Section 34). There is no exemption for an LLP that did no business — even a freshly registered LLP that never traded owes a Form 11 for the period from incorporation to 31 March. Miss the deadlines and the additional fee under Section 69 kicks in at ₹100 per day, per form, and it does not stop. Two neglected years across the two forms can run past ₹1.4 lakh before you have done anything at all. Closing a dead LLP is not housekeeping — it stops the meter.
Strike-off under Rule 37: the fast route for a clean, dead LLP
The good news is that if the LLP has nothing left on its books, you do not need a liquidator or a tribunal. Rule 37 of the LLP Rules, 2009 lets you apply directly to the Registrar to strike the LLP's name off the register using Form 24. It is the LLP equivalent of a company's STK-2 strike-off — quick and inexpensive, provided you qualify.
Who qualifies for Form 24
There are two eligibility gates, and you must clear both:
- The LLP is genuinely defunct. Either it has not commenced business since incorporation, or it has ceased commercial operations for at least one year immediately before the application.
- Nil assets and nil liabilities. The LLP must have nothing on its books — no money, no assets, no debts. Close the bank account and clear the books first. You cannot strike off an LLP that still holds funds, property or liabilities through this route.
The catch: bring your annual filings up to date first
This is the requirement that trips most people. Before you can file Form 24, the LLP must have filed its overdue Form 8 and Form 11 up to the end of the financial year in which it ceased to carry on business. You cannot escape the annual filings simply by closing — you have to be current up to the cessation year first. If you are behind, that clean-up is the annual-compliance work you have been avoiding, and it has to be done before the strike-off can proceed.
What goes into Form 24
The application pack is specific:
- Consent to make the application, signed by all the partners.
- A statement of accounts disclosing nil assets and nil liabilities, certified by a practising Chartered Accountant, made up to a date not earlier than 30 days before the date of filing.
- An affidavit and indemnity bond signed by the designated partners, undertaking to settle any lawful claim or liability that surfaces even after the LLP has been struck off.
- An acknowledgement of the latest income-tax return — or, where no return was required because the LLP never carried on business, a statement to that effect.
- The initial LLP agreement and any amendments, if not already filed.
- A detailed application setting out the reason for closure.
What the Registrar does next
Once the Registrar is satisfied with the pack, the LLP's name is published — in the official gazette and on the MCA portal — inviting objections for a notice period. If no cause to the contrary is shown, the Registrar strikes the LLP off the register and it stands dissolved. Note what the indemnity means: strike-off closes the entity, but the partners remain liable to meet any genuine liability that emerges afterwards. It ends the compliance obligation; it does not erase real debts.
When strike-off won't work: voluntary winding up (Sections 63–65)
If the LLP still has assets to realise, creditors to pay, or genuinely unfinished business, Form 24 is not available to you — you take the voluntary winding-up route under Sections 63 to 65 of the LLP Act, 2008. That is a heavier process: a resolution passed by at least three-fourths of the partners, the appointment of a liquidator (with the approval of creditors representing two-thirds in value where there are creditors), realisation of the assets, settlement of the debts, and a formal dissolution. It is slower and dearer — which is exactly why qualifying for a clean Rule 37 strike-off, by clearing the books first, is worth the effort.
Where this fits in running your company
Closing an LLP is the last step of its lifecycle, and it depends on the earlier ones. You must be current on the annual filings — Form 8 and Form 11 — before you can strike off, so start there if you are behind. If you are looking back at how the LLP was set up, see registering an LLP through FiLLiP and converting a partnership firm into an LLP. For the company equivalent of this process, read the private company strike-off with STK-2. All of it sits under our pillar guide to the private limited and LLP compliance calendar.
How we handle it at RDA, Baner
At RDA Advisory in Baner, Pune, we close defunct LLPs cleanly — first bringing the overdue Form 8 and Form 11 filings up to date so you qualify, clearing the books to nil, drafting the CA-certified statement of accounts and the designated partners' affidavit and indemnity, and filing Form 24 through to the Registrar's dissolution. And where the LLP still has assets or liabilities, we tell you honestly that it needs the Sections 63–65 winding-up route and run that instead. Either way, we stop the ₹100-a-day meter that a neglected LLP keeps running. You will find us at Office No. 102, Snehraj Apartment, Baner, Pune 411045, on +91 77570 45059.
Book a consult at rdatax.in
Have an LLP you stopped using and want it closed before the penalties grow any further? We will check whether it qualifies for a Form 24 strike-off, clear the pending filings, and take it all the way to dissolution. Book a consultation at rdatax.in or call the Baner office.
Verification note: this guide explains the striking off of a defunct Limited Liability Partnership under Rule 37 of the LLP Rules, 2009 through Form 24 — including the eligibility conditions (the LLP has not commenced business since incorporation, or has ceased commercial operations for at least one year immediately preceding the application, and has nil assets and nil liabilities), the requirement to file all overdue Form 8 (statement of account and solvency, under Section 34) and Form 11 (annual return, under Section 35) up to the end of the financial year in which the LLP ceased business before applying, and the Form 24 documents (consent of all partners, a statement of accounts disclosing nil assets and liabilities certified by a practising Chartered Accountant made up to a date not earlier than 30 days before filing, an affidavit and indemnity bond by the designated partners, the latest income-tax return acknowledgement, and the LLP agreement). It also notes the additional fee for late annual filings under Section 69 of the LLP Act (₹100 per day per form, with no upper cap), and the alternative voluntary winding-up route under Sections 63 to 65 of the LLP Act, 2008 for an LLP that still has assets or liabilities. Forms, fees and timelines are periodically revised — confirm the current position for your LLP with your CA before filing.
