Striking off or dissolving a limited liability partnership

Question 1

1. Voluntary strike off

Accepted Answer

A limited liability partnership (LLP) may apply to the Registrar of Companies to be struck off the Companies House register and dissolved. This is called voluntary strike off.

1.1 Who can apply

The application needs to be made by the majority of the LLP’s members. If there are only 2 members, both members must apply. If there is 1 member, that member can apply.

You may wish to apply for strike off if the LLP is no longer needed, for example if:

the members wish to retire and there is no one to take over
the number of members has fallen below the statutory requirement of 2 for over 6 months, exposing the remaining member to personal liability for the LLP’s debts
it is a subsidiary whose name is no longer needed
it was set up to exploit an idea that turned out not to be feasible

You may choose to apply for strike off if your LLP is dormant or no longer trading. This is not an alternative to formal insolvency proceedings.

Even if the LLP has been struck off and dissolved, creditors and others could apply for the LLP to be restored to the register.

1.2 Criteria for strike off

You cannot apply for strike of if, in the last 3 months, your LLP has:

traded or otherwise carried on business
changed its name
has made a disposal for value of property or rights that it held for the purpose of disposal for gain in the normal course of trading or carrying on business – for example, an LLP that sold apples could not continue selling apples, but it could sell the truck it once used to deliver the apples

You cannot apply for strike off if, in the last 3 months your LLP has engaged in any activity other than one that’s necessary to:

apply for strike off or decide whether to do so, for example seeking professional advice on the application or paying the strike off application fee
conclude the affairs of the LLP, such as settling trading or business debts
comply with a statutory requirement

You also cannot apply for strike off if the LLP is the subject, or proposed subject, of:

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

You can apply for strike off if the LLP has settled trading or business debts in the previous 3 months.

For all circumstances where an LLP may not apply for strike off, see sections 1004 and 10005 of the Companies Act 2006 as applied to LLPs by the Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009.

It’s an offence to apply for strike off if your LLP is not eligible. You could receive a fine.

1.3 Before you apply

Before applying for strike off, you need to close down your LLP properly, for example closing the LLP’s bank account and transferring any domain names.

You also must inform people who are likely to be affected by the LLP’s dissolution, for example:

creditors
members
employees
organisations or parties who might have an interest in the LLP’s affairs, like HMRC, local authorities, training and enterprise councils and government agencies

1.4 How to apply and who to tell

You can apply to strike off and dissolve your LLP online or by post.

Who you must tell about the application

Within 7 days of applying, you must send a copy of the application to:

members of the LLP, not including those who have made the application
employees
existing and likely creditors such as banks, suppliers, former employees that the LLP owes money, landlords, tenants (for example, where a bond is refundable), guarantors and personal injury claimants
appropriate offices of HMRC and the Department of Work and Pensions (DWP) if there are outstanding, contingent or prospective liabilities
a manager or trustee of any employee pension fund of the LLP

You must also send a copy of the application to anyone who, after the application has been made, becomes a:

member
employee
creditor
manager or trustee of any employee pension fund of the LLP

You must do this within 7 days of their appointment. This obligation continues until the dissolution of the LLP or the withdrawal of the application.

If you do not notify the relevant parties you will be committing an offence. You could get a fine or, in the most serious cases, a maximum 7 year prison sentence.

How to tell interested parties about the application

You can post them a copy of your application for strike off or leave it at:

an individual’s last known address
an LLP or other body’s principal or registered office address

You can also make a creditor of the LLP aware of the application by leaving a copy of it at or posting it to the place of business the LLP has dealt with in relation to the current debts. For example, the branch from where you ordered goods or which invoiced you. If there’s more than one such place of business, you should deliver a copy of the application to each of them.

It is advisable to keep records of proof of delivery or posting the application.

1.5 After you apply

Companies House will examine the application and, if it’s acceptable, will:

register the application and put it on the LLP’s public record
send an acknowledgement to the address on the application
notify the LLP at its registered office address
publish notice of the proposed striking off in the relevant Gazette
place a copy of a Gazette notice on the LLP’s public record

If there is no reason to delay, the registrar will strike the LLP off the register not less than 2 months after the Gazette notice is published.

The LLP will be dissolved once a second notice stating this is published in the relevant Gazette.

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.

The Gazette

The Gazettes are the official newspapers of record in the UK. There are 3 Gazettes, the:

London Gazette, for LLPs incorporated in England and Wales
Edinburgh Gazette, for LLPs incorporated in Scotland
Belfast Gazette, for LLPs incorporated in Northern Ireland

LLP strike off notices will appear in the Gazette for the part of the UK that the LLP was incorporated. The Gazettes are published weekly.

You can also find Gazette notices by checking an LLP’s record on the Companies House register.

Find out more about the Gazettes.

1.6 Withdraw an application

You must withdraw the strike off application immediately, if the:

members change their mind and no longer want the LLP struck off
LLP no longer meets the criteria for strike off

You can withdraw your application for strike off online or by post.

Read the full circumstances of when you must withdraw an application for strike off. You may be committing an offence if you do not withdraw your application under these circumstances.

1.7 If you do not follow the requirements

There could be serious consequences if you do not comply with the requirements when making an application to strike off your LLP. It is an offence:

to apply for strike off when the LLP is ineligible
to provide false or misleading information in, or in support of, an application
not to send a copy of the application to all relevant parties within 7 days
not to withdraw application if the LLP becomes ineligible.

You could receive a potentially unlimited fine on summary conviction (before a magistrates’ court or Sheriff Court) or an unlimited fine on indictment (before a jury).

If you do not give a copy of the application to relevant parties with the intention of concealing the application, you could go to prison for up to 7 years and receive an unlimited fine.

You may also be disqualified from being a director for up to 15 years.

Find out more about how Companies House enforces the law.

Question 2

2. When the registrar can strike off an LLP

Accepted Answer

in some circumstances, the Registrar of Companies can strike an LLP off the register.

2.1 If the LLP is not carrying on business or in operation

The registrar may commence steps to strike an LLP off the register, if they have a reasonable cause to believe the LLP is not carrying on business or in operation. The registrar may form this view if:

they have not received annual documents the LLP should have sent, like its confirmation statement or accounts
the LLP has no members

Before striking an LLP off the register, the registrar will try to communicate with the LLP to ask whether it’s still carrying on business or in operation.

If the registrar is satisfied that it’s not, for example if the LLP does not respond, they will publish a notice in the relevant Gazette. This notice will state their intention to strike the LLP off the register unless they’re given reason not to do so.

A copy of the Gazette notice will be placed on the LLP’s public record.

If the registrar sees no reason to do otherwise, they will strike off the LLP not less than 2 months after the date of the notice. The LLP will be dissolved on publication of a further notice stating this in the relevant Gazette.

2.2 If the LLP was registered on a false basis

The registrar may commence steps to strike an LLP off the register, if they have a reasonable cause to believe one of the following:

any information contained in the application for the registration of the LLP, or in any application for administrative restoration of the LLP to the register, is misleading, false or deceptive in a material particular
any statement made to the registrar in connection with such an application is misleading, false or deceptive in a material particular

The registrar may also take into consideration information contained in any documents delivered to them as part of the application for registration or administrative restoration.

When the registrar has formed their belief that information meets the threshold for being registered on a false basis, they will publish a notice in the relevant Gazette. This notice will sate their intention to strike the LLP off the register unless they’re given reason not to do so.

A copy of the Gazette notice will be placed on the LLP’s public record.

If the registrar sees no reason to do otherwise, they will strike off the LLP not less than 28 days after the date of the notice. The LLP will be dissolved on publication of a further notice stating this in the relevant Gazette.

2.3 If the LLP does not change its registered office address from the default address

LLPs must have an ‘appropriate’ registered office address at all times.

If the registrar is satisfied an LLP does not have appropriate registered office address, they may change it to an address held and maintained at Companies House. This is called a ‘default’ address.

The LLP can appeal to the court against the registrar’s decision.

If the LLP does not appeal, it has 28 days to deliver a notice changing its registered office address from the default address. The new registered office address must be an appropriate address.

Check the rules for registered office addresses.

If an LLP does not change their registered office within 28 days from being moved to the default address, the registrar may commence steps to strike the LLP off the register.

Before striking an LLP off the register, the registrar will publish a notice in the relevant Gazette stating their intention to strike the LLP off the register unless they’re given reason not to do so.

A copy of the Gazette notice will be placed on the LLP’s public record.

If the registrar sees no reason to do otherwise, they will strike off the LLP not less than 2 months after the date of the notice. The LLP will be dissolved on publication of a further notice stating this in the relevant Gazette.

2.4 Stop your LLP being struck off

If the registrar is striking off your LLP as they believe it is no longer in business or in operation, you should:

reply promptly to any enquiry letters from the registrar
deliver any outstanding documents as soon as possible

If the registrar is striking off your LLP as they believe it was formed on a false basis, you will need to give evidence which satisfies the registrar that they did not have a reasonable cause to believe this.

If the registrar is striking off your LLP as its registered office is at the default address, you should:

deliver a notice to Companies House changing your registered office address from the default address
include evidence that the new address is appropriate and that you own or have the right to use the address

Question 3

3. Assets of a dissolved LLP

Accepted Answer

From the date of dissolution, any assets of a dissolved LLP will pass back to the Crown. These ownerless assets are known as ‘bona vacantia’, which means ‘vacant goods’.

The LLP’s bank account will be frozen and any credit balance in the account will be passed to the Crown.

You should address any enquiries about bona vacantia property to the appropriate department.