Limited Liability Partnerships : Limited Liability Partnership Strike off, Dissolution & Restoration

We have tried to summarize the steps you need to take if you have decided to dissolve your Limited Liability Partnership or if you want to restore it to full function. You may want to dissolve a partnership for various reasons; for instance, the members may want to retire, the number of designated members may have come down below the requirement of two, or may be the LLP has outlived its purpose. In either of the cases, you may apply to the registrar to strike off the name of your business from the index. However, this procedure is not an alternative to the insolvency procedures and creditors of an LLP can apply for it to be restored at any time.

This previous method is known as the Voluntary strike off and dissolution, and it can be made by a majority of the members. This process is not applicable for LLPs that have in the previous 3 months, changed their name, traded or continued business, made a disposal of their property or rights, or engaged in activities in any other way than to dissolve the functions of the business.
The point in contention is an LLP that wishes to be struck off the registrar’s index must not carry out any kind of activity that can be deemed as business in the last three months of its existence. For instance, an LLP manufacturing pens cannot be selling off its machineries in those three months; however, it may pay money to a professional for advice on procedures to dissolve the business. Again, before applying it becomes imperative that an LLP notify its creditors and all those people who may object to the dissolution of its businesses.

It is an offence to apply for a strike off when the LLP is actually not eligible, or to provide false misleading information in the application. As such, there are provisions for withdrawal of an application in cases when the LLP becomes ineligible after submitting the application. Also, a copy of the application must necessarily be sent to all the members, creditors, employees, and managers or trustees of any existing employee pension fund. Upon dissolution, the registrar publishes a notice in one of the three weekly Gazettes (the London Gazette, the Edinburgh Gazette, or the Belfast Gazette) depending on the area in which the registered office of the LLP is located.

The registrar may strike off the name of an LLP of his own volition, considering it out of business. Of course, this happens when the LLP in contention does not submit their documents on time, does not reply to the mail sent by the registrar, or does not have any members. Before striking off, the registrar officially sends two letters of communication to the registered office of the LLP. Later, the registrar publishes a notice in the Gazette stating that the name of the business shall be struck off the register. Three months after this notice, and without any response from the LLP, the registrar formally strikes the name of the business off of his index. The assets of a partnership that has been dissolved are declared ‘Bona Vacantia’ or ‘vacant goods’ and are moved to the Crown.

Only the registrar can officially restore the name of an LLP to the index following an order from the court. Individuals like, former members, creditors, people with contractual relationships with the LLP, or as such any person related to the LLP can apply for a restoration of the partnership within 6 years of its dissolution. There are costs and penalties involved with the restoration of an LLP. In certain cases, where the registrar had struck off the name of the partnership, a former member can apply for restoration. These restorations are known as ‘administrative restorations.’ Applications for ‘administrative restorations’ can be made to the registrar directly and subsequently to the court within a period of 28 days, if the registrar decides not to restore the LLP. Often after an LLP is restored it is found that its name is the same as one in the index; in such cases, the LLP has to go through an obligatory change of name.