Voluntary LLP Strike-Off: Application Now Lies Before C-PACE

On August 5, the Ministry of Corporate Affairs (MCA) notified amendments to the Limited Liability Partnership Rules, 2009, aimed at reducing the time required for LLP closures. Effective August 27, all applications for the voluntary strike-off of LLPs must be processed through the Centre for Processing Accelerated Corporate Exit (C-PACE).

Established last year, C-PACE was designed to facilitate a smoother and quicker process for striking off company names from the MCA Register. This move aligns with the MCA’s broader efforts to enhance ease of doing business and ease of exit for companies.[1]

The recent amendments to Sub-rules (1), (3), and (4) of Rule 37 now mandate that LLPs, which have not been carrying on any business or operation for a period of one year or more, submit their strike-off applications to C-PACE. This change follows an announcement by the Minister for Finance and Corporate Affairs Nirmala Sitharaman during this year’s Budget presentation.

Additionally, MCA has notified amendments to the Companies (Adjudication of Penalties) Rules, 2014. The new Rule 3A specifies that all proceedings of the adjudicating officer and Regional Director under the Rules must be conducted electronically through the Central Government’s e-adjudication platform. This includes issuing notices, filing replies or documents, holding of hearings, etc. These amendments will come into effect on September 16.

[1]https://pib.gov.in/PressReleseDetailm.aspx?PRID=1923879#:~:text=The%20Office%20of%20C%2DPACE,Director%20General%20of%20Corporate%20Affairs.