FID Trust International

Voluntary strike off and dissolution

An LLP may apply to the registrar to be struck off the register and dissolved. The LLP can do this if it is no longer needed. For example, the members may wish to retire and there is no-one to take over from them; or the number of members may have fallen below the statutory requirement for 2 for more than 6 months, thereby exposing the remaining member to personal liability for the LLP’s debts; or it is a subsidiary whose name is no longer needed; or it was set up to exploit an idea that turned out not to be feasible. Some LLP’s who are dormant or non-trading choose to apply for strike off. If you have decided that you no longer want to retain your LLP and wish to have it struck off, the registrar will not normally pursue any outstanding late filing penalties unless you restore the LLP to the register at a later stage.

This procedure is not an alternative to formal insolvency proceedings where these are appropriate. Even if the LLP is struck off and dissolved, creditors and others could apply for the LLP to be restored to the register.

An application for voluntary striking off may be made by a majority of the members. However, if there are only 2 members it must be made by both of them and if there is only 1 remaining member that member can apply.

Sections 1004 and 1005 of the Companies Act 2006, as applied to LLPs by the Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009 set out the circumstances in which the LLP may not apply to be struck off. For example, the LLP may not make an application for voluntary strike off if, at any time in the last 3 months, it has:

  1. traded or otherwise carried on business;
  2. changed its name;
  3. made a disposal for value of property or rights that, immediately before ceasing to trade or otherwise carry on business, it held for the purpose of disposal for gain in the normal course of trading or otherwise carrying on business. For example, an LLP in business to sell apples could not continue selling apples during that 3 month period but it could sell the truck it once used to deliver the apples or the warehouse where they were stored;
  4. engaged in any other activity except one which is necessary or expedient for the purpose of:
    • making an application for strike off or deciding whether to do so. For example, an LLP may seek professional advice on the application and pay the cost of submitting the application Form LL DS01;
    • concluding the affairs of the LLP;
    • complying with any statutory requirement.

An LLP also cannot apply to be struck of if it is the subject, or proposed subject, of:

  • any insolvency proceedings (such as liquidation, including where a petition has been presented but has not yet been dealt with);
  • a scheme under section 895 of the Companies Act 2006 as applied to LLPs (that is a compromise or arrangement between an LLP and its creditors or members.

However, an LLP can apply for strike off if it has settled trading or business debts in the previous 3 months. You can find further circumstances in which you cannot make an application in sections 1004 & 1005 of the Companies Act 2006 as applied to LLPs by the Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009.

If your LLP has creditors, members etc, you must warn all the people listed in question 5, before applying, as any of them may object to the LLP being struck off. You should deal with any loose ends, such as closing the LLP’s bank account, the transfer of any domain names before you apply.

You may notify any other organisation or party who may have an interest in the LLP’s affairs, otherwise they might later object to the application. Examples include Her Majesty’s Revenue and Customs, local authorities, especially if the LLP is under any obligation involving planning permission or health and safety issues, training and enterprise councils and government agencies.

From the date of dissolution, any assets of a dissolved LLP will belong to the Crown. The LLP’s bank account will be frozen and any credit balance in the account will pass to the Crown.

You must complete the Striking off application by an LLP – Form LL DS01.

The members making the application must send a copy to the following people, within 7 days of sending the application to the registrar:

  1. members of the LLP, except for the members making the application,
  2. employees of the LLP,
  3. creditors of the LLP. Including all contingent (existing) and prospective (likely) creditors such as banks, suppliers, former employees if the LLP owes them money, landlords, tenants (for example, where a bond is refundable), guarantors and personal injury claimants. Also, you must notify appropriate offices of Her Majesty’s Revenue and Customs (HMRC) and Department of Work and Pensions (DWP) if there are outstanding, contingent or prospective liabilities,
  4. a manager or trustee of any employee pension fund of the LLP The members must also give a copy of the application to any person who, after the application has been made, becomes a member, employee or creditor of the LLP, or a manager or trustee of any employee pension fund of the LLP within 7 days of their appointment. This obligation continues until the dissolution of the LLP or the withdrawal of the application.

The registrar will publish notice of the proposed striking off in the Gazette to allow interested parties the opportunity to object. A copy of this notice will be placed on the LLP's public record. If the registrar sees no reason to do otherwise, he will strike off the LLP not less than 3 months after the date of the notice. The LLP will be dissolved on publication of a further notice stating this in the relevant Gazette.

LLPs no longer carrying on business or in operation

The registrar strike off an LLP on his own initiative if it is neither carrying on business nor in operation. The registrar may take this view if, for example:

  1. he has not received documents from an LLP that should have sent them to him,
  2. mail that the registrar has sent to an LLP’s registered office is returned undelivered,
  3. the LLP has no members.

Before striking off the register, the registrar must write two formal letters and send notice to the LLP’s registered office to inquire whether it is still carrying on business or in operation. If he is satisfied that it is not, he will publish a notice in the relevant Gazette stating that he intends to strike the LLP off the register unless he is shown reason not to do so.

A copy of the notice will be placed on the LLP’s public record. If the registrar sees no reason to do otherwise, he will strike off the LLP not less than 3 months after the date of the notice. The LLP will be dissolved on publication of a further notice stating this in the relevant Gazette.

Further details of the procedure can be found in section 1000 of the Companies Act 2006, as applied to LLPs.

From the date of dissolution, any assets of a dissolved LLP will be “bona vacantia”. Bona vacantia literally means “vacant goods”, and is the technical name for property that passes to the Crown because it does not have a legal owner. The LLP’s bank account will be frozen and any credit balance in the account will be passed to the Crown.