Striking Off an LLP under Rule 37 & Form 24 Guide

Director signs important corporate documents

Executive Overview: The Corporate Lifecycle and Orderly Exit of Defunct LLPs

The Limited Liability Partnership (LLP) framework, introduced in India by the Limited Liability Partnership Act, 2008, was conceived as an ideal hybrid organizational vehicle combining the flexibility of a partnership with the limited liability protections of a corporate entity. Over the past decade, hundreds of thousands of LLPs were incorporated across technology consulting, professional services, trading, and real estate ventures. However, shifting commercial priorities, founder disagreements, unviable business models, or project completions frequently lead to LLPs becoming dormant or inoperative. While many promoters assume that an inactive LLP requires no ongoing attention, Indian company law enforces severe statutory consequences for non-compliance: under Section 34 and Section 35 of the LLP Act, failing to file annual statutory returns (Form 8 - Statement of Account & Solvency, and Form 11 - Annual Return) attracts relentless compounding additional fees of ₹100 per day per form without any upper statutory cap.

To provide an orderly, cost-effective, and legally binding exit mechanism for defunct or inoperative entities, the Ministry of Corporate Affairs (MCA) enacted Section 75 of the LLP Act, 2008, operationalized through Rule 37 of the Limited Liability Partnership Rules, 2009. Under this administrative framework, a defunct LLP that has ceased operations or has never commenced business can make a formal application to the Registrar of Companies (ROC) in Form 24 to have its name struck off from the register of LLPs.

Striking off an LLP via Form 24 is fundamentally different from winding up or liquidation under Sections 63 to 65. Winding up is an elaborate, judicial or creditor-driven process involving the appointment of a liquidator, realizations of assets, settlement of claims, and NCLT hearings. In contrast, Rule 37 strike-off is a streamlined executive closure available exclusively to entities that have achieved complete financial neutralization—possessing NIL assets and NIL liabilities. Practicing company secretaries, chartered accountants, and corporate controllers utilizing assureOffice and its cloud practice management suite assurePractice must master the mandatory eligibility filters, the strict 30-day validity window for the certified Statement of Account, partner indemnity documentation, the interplay with overdue annual returns post-amendment, and tax clearances to execute seamless, risk-free closures.

Statutory Framework: Section 75 Read with Rule 37

Section 75 of the LLP Act, 2008 empowers the Registrar of Companies to strike off the name of an LLP where the Registrar has reasonable cause to believe that the LLP is not carrying on business or its operations. This regulatory action can be triggered through two distinct pathways:

Suo Motu Strike-Off by the Registrar (Rule 37(1)(a)): The ROC initiates action on its own motion after issuing a 1-month statutory notice to the LLP and its partners where the entity has failed to file statutory statements for consecutive years.
Voluntary Strike-Off by the LLP (Rule 37(1)(b)): The LLP itself makes an application in Form 24 with the consent of all its partners, requesting the ROC to remove its name from the register.

The Core Statutory Eligibility Pre-Requisites

Before an LLP can execute and upload Form 24 on the MCA V3 portal, it must satisfy four mandatory statutory criteria under Rule 37(1)(b):

Period of Non-Operation: The LLP must either:
- Never have commenced business or operations since its incorporation; or
- Have ceased to carry on any business or commercial operations for a continuous period of at least one (1) year prior to the date of application.
Absolute Financial Neutrality (Nil Assets & Nil Liabilities): The LLP must have zero external creditors, zero outstanding loans, zero unpaid statutory taxes or duties, zero trade payables, and zero realizable assets or bank balances on the date of the Statement of Account. Any existing bank accounts must be formally closed and confirmation certificates obtained.
Unanimous Partner Consent (100% Consent): Unlike general corporate resolutions where a simple or special majority suffices, Rule 37(1)(b) strictly mandates the written consent of all partners of the LLP. If an LLP has five partners, every single partner must execute the consent letter; a dissent or omission by even one partner invalidates the application.
Closure of Active Bank Accounts: The LLP must close all operative bank accounts in its name and secure an official Bank Account Closure Letter from each banking institution confirming that the account balance is zero and the account has been permanently deactivated.

Mandatory Documentary Exhibits Attached to Form 24

Form 24 must be supported by a standardized, legally binding dossier of six mandatory statutory exhibits. Deficiencies or date mismatches in any of these exhibits trigger immediate rejection or resubmission notices from the MCA Central Processing Centre (CPC):

Exhibit 1: Statement of Account Certified by a Practicing Chartered Accountant

The Statement of Account is the financial cornerstone of Form 24. Under Rule 37(1A)(a), it must reflect the exact financial position of the LLP showing NIL assets and NIL liabilities. Crucially, the rule establishes a strict temporal boundary: the Statement of Account must be prepared up to a date not more than thirty (30) days prior to the date of filing of Form 24. If the CA signs the Statement of Account on 1st October, Form 24 must be filed on the MCA portal on or before 31st October. Filing on 1st November renders the statement stale and legally invalid, requiring a fresh audit and recertification.

Exhibit 2: Joint or Individual Affidavits by Designated Partners

All Designated Partners must execute a sworn affidavit on non-judicial stamp paper, duly notarized, affirming that:

The LLP has not carried on any business operations since incorporation or has ceased operations from a specified date.
The LLP has no outstanding assets, liabilities, or dues to any bank, financial institution, government body, or third party.
The LLP has not accepted any public deposits and has no pending litigation, arbitration, or prosecution.

Exhibit 3: Indemnity Bond Executed by Designated Partners

Under Rule 37(1A)(c), every Designated Partner must execute an Indemnity Bond (either jointly or severally) on non-judicial stamp paper, undertaking to indemnify any person, creditor, or claimant against any lawful debt, claim, or liability that may arise or be discovered against the LLP after its name has been struck off. The indemnity specifically guarantees to indemnify the ROC and the Central Government against all costs and damages arising from the strike-off.

Exhibit 4: Written Consent of All Partners

A formal document signed by every partner of the LLP consenting to the filing of Form 24 for strike-off, confirming that all mutual rights and capital contributions have been settled among the partners.

Exhibit 5: Bank Account Closure Certificate

A formal certificate or stamped letter issued by the branch manager of the bank where the LLP maintained its current account, certifying the account number, confirming that the account has been closed, and affirming that the closing balance is zero.

Exhibit 6: Copy of Latest Income Tax Return (ITR-5) Acknowledgement

A copy of the latest ITR-5 acknowledgement filed with the Income Tax Department, or where the LLP never commenced operations and obtained PAN without filing returns, an explanatory affidavit confirming nil taxable income.

The Critical Relief on Overdue Annual Returns (Form 8 & Form 11)

Historically, one of the most punitive bottlenecks preventing inactive LLPs from striking off was the MCA requirement that all overdue annual filings (Form 8 and Form 11) had to be completed before filing Form 24. For an LLP dormant for 5 years, paying additional fees of ₹100 per day per form across 10 pending returns resulted in statutory penalties exceeding ₹3,00,000 to ₹5,00,000—far surpassing the initial capital of the business.

To eliminate this hardship, the MCA amended Rule 37 via the Limited Liability Partnership (Amendment) Rules, 2022 (notified on 4th March 2022). The amended proviso establishes a vital distinction:

LLPs that Never Commenced Operations: Where an LLP has not commenced business since its incorporation, it is exempt from filing overdue Form 8 and Form 11 before submitting Form 24, provided it files initial Form 3 (LLP Agreement) and submits Form 24 with the certified Nil Statement of Account.
LLPs that Commenced Business but Ceased Operations: Where an LLP commenced commercial operations and subsequently ceased business, it must complete its overdue annual filings (Form 8 and Form 11) up to the financial year in which it ceased operations before filing Form 24. However, it is not required to file annual returns for subsequent dormant years preceding the strike-off application.

8 Practical Case Studies & Worked Real-World Scenarios

Case Study 1: Technology Services LLP Dormant for 2 Years (End-to-End Execution)

Context & Facts: NexaByte Digital Solutions LLP was incorporated in Pune in July 2021 by two designated partners with ₹1,00,000 capital. It operated until March 2023, providing UI/UX design services. From 1st April 2023, both partners accepted overseas corporate employment, and the LLP ceased all commercial activity. By October 2024, the LLP had remained completely inactive for over 18 months. The partners wish to formally strike off the entity.

Execution Milestones:

Commercial & Financial Settlement: In October 2024, the partners settle all outstanding vendor invoices, pay remaining GST dues, and cancel their GSTIN. The current account with HDFC Bank is closed on 25th October 2024, obtaining a Bank Closure Certificate.
CA Statement of Account (Day 1): On 2nd November 2024, an independent practicing CA audits the books, confirms zero assets and liabilities, and signs the Statement of Account as of 31st October 2024.
Affidavits & Indemnity Bonds (Day 5): Both partners execute notarized Affidavits and Indemnity Bonds on ₹100 non-judicial stamp paper on 7th November 2024.
Form 24 Upload (Day 12): Form 24 is digitally signed and uploaded on the MCA V3 portal on 14th November 2024 (well within the 30-day window from the 31st October Statement of Account). Statutory fee of ₹1,000 is paid.
ROC Processing & Publication: The ROC scrutinizes the application and publishes a notice in Form LLP-19 on the MCA website inviting objections within 1 month. No objections are received from the tax authorities or public.
Dissolution: On 28th January 2025, ROC Pune strikes off the name and publishes a dissolution notification in the Official Gazette. The compliance docket is permanently archived in assurePractice.

Case Study 2: Rejection Due to the 30-Day Statement of Account Expiry

Context & Facts: BlueOcean Logistics LLP secured a CA-certified Statement of Account dated 10th August 2024 showing nil assets and liabilities. Due to delays in obtaining notarized affidavits from a designated partner travelling in Germany, Form 24 was submitted on the MCA portal on 18th September 2024 (39 days after the date of the Statement of Account).

MCA Scrutiny & Defect Notice:

Under Rule 37(1A)(a), the Statement of Account must be prepared up to a date not more than 30 days prior to the date of filing of the application.
The MCA Central Processing Centre issued a resubmission notice with defect code: "Statement of Account is stale; elapsed period exceeds 30 days."
Remediation: The partners engaged the practicing CA to prepare a revised Statement of Account made up to 25th September 2024. Form 24 was resubmitted with the refreshed financial statement on 2nd October 2024, securing approval. Promoters avoided this delay by tracking document lifecycles in assurePractice.

Case Study 3: Overdue Form 8 & 11 Exemption for an LLP that Never Commenced Operations

Context & Facts: AgriTech Ventures LLP was incorporated in November 2020 in Delhi. Due to regulatory changes in agricultural trading, the promoters never raised funds, never opened a bank account, and never commenced commercial transactions. However, they failed to file Form 8 and Form 11 for FY 2021-22, FY 2022-23, and FY 2023-24. An accountant quoted ₹3,50,000 in additional fees to clear past returns before strike-off.

Application of Amended Rule 37(1A) Proviso:

Filing Requirement	Historical Position (Pre-2022)	Current Law under 4th March 2022 Amendment
Filing Initial Form 3 (LLP Agreement)	Mandatory	Mandatory (Must be filed with ROC)
Filing Overdue Form 8 (Solvency)	Mandatory with ₹100/day fees	EXEMPT (Because business never commenced)
Filing Overdue Form 11 (Annual Return)	Mandatory with ₹100/day fees	EXEMPT (Because business never commenced)
Bank Account Closure Proof	Mandatory	Affidavit stating bank account was never opened
Statutory MCA Form 24 Fee	₹1,000	₹1,000 (Saved ₹3.5 Lakhs in late fees)

Outcome: AgriTech Ventures files Form 3 with the initial agreement, attaches a Nil Statement of Account and promoter affidavits certifying that business was never commenced, and successfully strikes off the LLP without paying a single rupee of overdue return penalties.

Case Study 4: Failure to Obtain 100% Partner Consent (The Dissenting Partner Trap)

Context & Facts: Horizon Consulting LLP had four partners, each holding a 25% profit-sharing ratio. Three partners resolved to close the business and file Form 24. The fourth partner, holding a personal grievance regarding historical intellectual property rights, refused to execute the consent letter and affidavit. The three partners filed Form 24 with 75% majority consent.

Legal Determination under Rule 37(1)(b):

Rule 37(1)(b) explicitly requires the consent of all partners. Unlike corporate board resolutions where Section 248 allows 75% special resolutions, the LLP framework enforces unanimous consent.
The ROC rejected Form 24 at the initial screening stage.
Alternative Course: Where unanimous consent is unattainable due to deadlocks or partner hostility, the majority partners cannot utilize Form 24. Their sole legal recourse is to file a Winding-Up Petition before the National Company Law Tribunal (NCLT) under Section 64(f) on the ground that it is just and equitable to wind up the LLP.

Case Study 5: Lingering Income Tax / GST Demand Blocking Dissolution

Context & Facts: Apex Freight LLP filed Form 24 on 1st September 2024 with a certified Nil Statement of Account. During the 1-month public notice period in Form LLP-19, the State GST Department filed a formal objection with the ROC, citing an outstanding demand of ₹2,40,000 in Form GST DRC-07 arising from an ITC mismatch in FY 2021-22.

Statutory Impact:

Under Rule 37(3), where any regulatory authority, tax department, or creditor files an objection within the notice period, the ROC is legally barred from striking off the name until the objection is resolved.
The ROC suspended processing and issued a show cause notice to the designated partners.
Resolution: The partners reviewed the GST order using assureTax and assureNotice, discharged the ₹2,40,000 demand through voluntary payment in Form GST DRC-03, and obtained a formal No Objection Certificate (NOC) from the GST Range Officer. Upon submitting the NOC to the ROC, the strike-off was completed.

Case Study 6: Active Bank Account with Residual Interest Balance

Context & Facts: CloudSphere Systems LLP submitted a CA Statement of Account showing NIL assets and liabilities. However, their current account at ICICI Bank had not been formally closed; it contained a residual interest credit balance of ₹420. The CA noted the bank account as "Zero" assuming immateriality.

Scrutiny Defect:

The MCA system requires the mandatory attachment of the Bank Account Closure Certificate. During scrutiny, the ROC verified that the bank account was active.
Under Rule 37, "Nil assets" is an absolute mathematical concept. A bank account with even ₹1 balance constitutes an active asset.
Remediation: The partners formally closed the account, transferred the ₹420 to their personal accounts as capital return, obtained a stamped Bank Closure Letter, and resubmitted Form 24 with a refreshed Statement of Account. Practice teams manage these reconciliations in assurePractice.

Case Study 7: Impact of Strike-Off on Designated Partner Disqualification

Context & Facts: Rakesh Gupta is a designated partner in a dormant LLP that has not filed returns for 4 years, and simultaneously serves as a Director in two active private limited companies. He fears that striking off the LLP under Form 24 will trigger director disqualification under Section 164(2) of the Companies Act, 2013 or deactivate his DIN/DPIN.

Company Law Analysis:

Section 164(2) of the Companies Act applies strictly to defaults committed by a company in filing financial statements or annual returns for three consecutive years.
The provisions of Section 164(2) do not automatically extend to defaults committed in a Limited Liability Partnership. Default in an LLP does not trigger director disqualification in companies.
Furthermore, voluntarily striking off an LLP via Form 24 is an orderly statutory exit, not a penal prosecution. Once the LLP is dissolved under Section 75, past non-filing defaults are extinguished, protecting Rakesh's DPIN from administrative blacklisting.

Case Study 8: Indemnity Enforcement Post-Strike-Off

Context & Facts: Alpha Infotech LLP was struck off in February 2024. In December 2024, a software vendor presented an unpaid invoice of ₹1,80,000 for server hosting services provided in 2022. The vendor threatened criminal prosecution, claiming the promoters illegally dissolved the entity to evade debt.

Operation of the Rule 37 Indemnity Bond:

Under Section 75(3), the striking off of an LLP does not affect the liability of its designated partners. The liability continues and may be enforced as if the LLP had not been dissolved.
Under the Indemnity Bond executed in Form 24, the designated partners have given an unconditional personal undertaking to pay any legitimate claims discovered post-dissolution.
The designated partners are personally, jointly, and severally liable to discharge the ₹1,80,000 vendor liability out of their personal funds. If they refuse, the creditor can file an application before the NCLT under Section 75(4) to revive the LLP or institute recovery proceedings in civil court.

10-Step Operational Verification Matrix for LLP Strike-Off

Corporate secretarial teams and practicing professionals must execute the following 10-step verification protocol to ensure complete compliance under Rule 37:

Step	Procedural Action	Statutory Citation	Key Risk / Verification Objective	assureOffice Tool
Step 1	Verify 1-Year Inactivity Filter	Rule 37(1)(b) LLP Rules	Confirm zero commercial transactions or bank movements for at least 12 months.	assurePractice
Step 2	Audit Assets & Liabilities (NIL Check)	Rule 37(1A)(a) LLP Rules	Ensure zero debtors, zero creditors, zero loans, and zero inventory in trial balance.	assureFinancials
Step 3	Surrender GST & Professional Tax	Section 29 CGST / State PT Acts	Cancel GSTIN, surrender professional tax, and secure formal cancellation orders.	assureTax
Step 4	Close All Commercial Bank Accounts	Rule 37 Attachments	Close current accounts and secure official Bank Closure Letters showing zero balance.	assurePractice
Step 5	Execute CA Statement of Account	Rule 37(1A)(a)	Engage practicing CA to sign Nil Statement; verify filing within 30 days.	assureFinancials
Step 6	Draft Affidavits & Indemnity Bonds	Rule 37(1A)(b) & (c)	Execute on non-judicial stamp paper; ensure notarization by all designated partners.	assurePractice
Step 7	Obtain 100% Unanimous Partner Consent	Rule 37(1)(b)	Secure written consent letters from every partner; verify no partner dissents.	assurePractice
Step 8	Verify Initial Form 3 Status	MCA Notification 04.03.2022	Ensure initial LLP Agreement was filed in Form 3 on MCA portal.	assurePractice
Step 9	Upload Form 24 on MCA V3 Portal	Rule 37(1) & Form 24	Affix Designated Partner DSCs; pay ₹1,000 statutory fee; track SRN.	assurePractice
Step 10	Monitor Form LLP-19 Public Notice	Rule 37(2) & (3)	Track 1-month objection period; obtain final Gazette dissolution order.	assurePractice

16 In-Depth Practitioner FAQs

1. What is the statutory filing fee for Form 24 on the MCA portal?

The government filing fee for Form 24 (Application for striking off the name of an LLP) is a flat statutory fee of ₹1,000. Unlike regular annual filings, there are no additional daily late fees associated with Form 24 itself.

2. Can an LLP apply for strike-off immediately after incorporation if it never started business?

Yes. Under Rule 37(1)(b), an LLP that has not commenced business since its incorporation is eligible to apply for strike-off immediately without waiting for the completion of one year.

3. How long must an operational LLP wait after stopping business before filing Form 24?

An LLP that carried on commercial operations must have ceased all business activities for a continuous period of at least one (1) full year before it is legally eligible to submit Form 24.

4. What is the validity period of the CA-certified Statement of Account?

Under Rule 37(1A)(a), the Statement of Account must be prepared up to a date not more than thirty (30) days prior to the date of filing Form 24. If Form 24 is filed after 30 days from the statement date, it will be rejected as stale.

5. Can an LLP with outstanding liabilities or creditors apply for strike-off?

No. An LLP must have NIL liabilities. All trade payables, loans, and statutory taxes must be settled prior to filing Form 24. Any entity with outstanding debts must undergo formal winding up under Section 63.

6. Is it mandatory to close the LLP's bank account before filing Form 24?

Yes. The LLP must formally close all active bank accounts and attach a Bank Account Closure Certificate issued by the bank confirming zero balance and permanent deactivation.

7. Can a strike-off application be filed if one partner out of four refuses to sign?

No. Under Rule 37(1)(b), the consent of all partners (100%) is mandatory. A majority vote is insufficient. If a partner refuses, the remaining partners must file a winding-up petition before the NCLT.

8. Does an LLP that never commenced operations need to file overdue Form 8 and Form 11 before Form 24?

No. Following the MCA amendment on 4th March 2022, an LLP that never commenced operations since incorporation is exempt from filing overdue Form 8 and Form 11, saving substantial additional fees.

9. Does default in filing LLP annual returns disqualify a partner from being a director in companies?

No. Director disqualification under Section 164(2) of the Companies Act applies exclusively to defaults in companies, not LLPs. Default in an LLP does not automatically trigger DIN disqualification.

10. What is Form LLP-19?

Form LLP-19 is the public notice issued by the Registrar of Companies on the MCA website notifying the public of the proposed strike-off and inviting objections within one month.

11. Are designated partners relieved of liabilities after the LLP is struck off?

No. Under Section 75(3) and the terms of the Indemnity Bond, the personal liability of designated partners continues and may be enforced against them personally for any undetected past claims.

12. Can a struck-off LLP be revived in the future?

Yes. Under Section 75(4), any aggrieved partner, creditor, or interested party can file an appeal before the NCLT within five (5) years from the date of the order to restore the LLP to the register.

13. Can an LLP with an active GST registration file Form 24?

No. The LLP should formally surrender its GST registration and obtain a final cancellation order before applying for strike-off to ensure no tax objections are filed by the department during the public notice period.

14. Is an Indemnity Bond required from all partners or only designated partners?

Under Rule 37(1A)(c), the Indemnity Bond is specifically required to be executed by the Designated Partners of the LLP, either jointly or severally.

15. Can an LLP strike off if there is a pending legal case before a consumer forum or court?

No. The partners must swear on affidavit that there is no pending litigation, arbitration, or prosecution. If litigation is pending, Form 24 cannot be filed until the case is disposed of or settled.

16. What is the difference between striking off an LLP and winding up?

Striking off is a fast-track administrative closure for dormant entities with zero assets and liabilities. Winding up is an elaborate legal process involving asset liquidation, debt settlement, and NCLT approval.