If you are planning to dissolve an LLP in the UK, you must apply to have the partnership ‘struck off’ in accordance with the Companies Act 2006 (section 1003), as applied by the Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009.
This involves meeting certain qualifying conditions, notifying all concerned parties who may be affected by the closure, and sending a striking off application to Companies House.
In this post, we discuss all of these requirements and the procedure you will need to follow to voluntarily strike off and dissolve a limited liability partnership in the UK.
Procedure to dissolve an LLP in the UK
You can apply to Companies House (the Registrar) for voluntary strike off and dissolution if you no longer require your limited liability partnership (LLP).
To do so, a majority of the LLP’s members must agree to the action and sign the application. If there are only two members, both members must sign it. Where there is only one remaining member, the sole member can make the application.
Step 1 – Check the LLP’s eligibility for voluntary strike off
To be eligible to make an application for voluntary strike off and dissolution, the LLP must be solvent and not have carried out any of the following activities in the last three months:
- traded or otherwise carried on any type of business activity
- changed its name
- sold assets (stock, property, rights) belonging to the business that it previously sold in the course of doing business – e.g. an LLP that sold furniture would not be permitted to continue selling furniture during that three-month period, but it could sell its delivery vans, machinery, or warehouse
- engaged in any other activity, with the exception of one that is essential or appropriate for the purpose of:
- deciding whether to apply for dissolution or making an application to do so – e.g. seeking professional advice or paying the application filing fee
- concluding the affairs of the partnership
- complying with any statutory requirements, e.g. filing a confirmation statement, accounts, or tax return
Additionally, you cannot apply for voluntary strike off and dissolution if the LLP is the subject (or proposed subject) of:
- insolvency proceedings, e.g. liquidation
- any compromise or arrangement with its creditors or members
If an LLP satisfies all of these qualifying conditions, it is eligible to apply to Companies House for voluntary strike off and dissolution.
Step 2 – Notify all affected parties
Prior to making an application to dissolve an LLP, you have a legal duty to notify all parties who are likely to be affected by the LLP’s dissolution. This includes:
- every LLP member, with the exception of those making the application
- employees of the partnership
- all existing and prospective creditors of the LLP, such as banks, lenders, suppliers, service providers, former employees (if the LLP owes them money), landlords, guarantors, and personal injury claimants
- all relevant HMRC departments/offices, such as Self Assessment, VAT, PAYE, Department for Work and Pensions (DWP)
- a manager or trustee of any employee pension fund that the LLP has in place
- any other organisation or party who may have an interest in the partnership’s affairs
Within seven days of filing the striking off application at Companies House, you must provide a copy to all of the aforementioned parties.
Additionally, if anyone becomes a member, employee, creditor, or employee pension fund manager/trustee after you make the striking off application, you must also provide them with a copy within seven days of their appointment.
These measures are in place to safeguard the interests of all persons who have an interest in the LLP and may object to it being struck off and dissolved.
It is also important to tie up any loose ends before applying to dissolve an LLP. This includes closing the LLP’s business bank account and dividing all business assets between members.
Upon the date of dissolution, any remaining assets of the dissolved LLP will transfer to the Crown. The LLP’s business bank account will be frozen and any credit balance that remains in the account will also pass to the Crown.
Step 3 – Apply to dissolve the LLP
If the LLP is eligible for dissolution and you have notified all affected parties, you can apply to Companies House to strike off and dissolve your limited liability partnership.
To do so, you must complete form LL DS01—Striking off application by an LLP with the following information:
- LLP registration number
- full name of the LLP
- name, signature, and signature date of each member who is making the application
You can complete and file this form online, or download it and send it by post. If you choose the postal option, you will need to enclose a cheque or postal order for £10 to cover the cost of the application fee.
You must ensure that the form is signed by a majority of members, or both members if the LLP has only two. However, if there is only one remaining member, only their signature is required.
When Companies House receives the application, they will examine it and (if accepted) place it on the public register. You will also receive a copy at your LLP’s registered office address.
Companies House will then publish notice of the proposed striking off in The Gazette. This is to give interested parties the opportunity to object.
Provided that no one makes an objection within three months of the date of the notice, Companies House will strike off and dissolve the limited liability partnership. When this happens, the LLP will no longer exist.
Why would I close a limited liability partnership?
There are several reasons why you would strike off and dissolve an LLP, such as:
- one or more members want to retire and there is no one available to replace them
- the members wish to go their separate ways and explore other professional avenues
- to run the business through a different legal structure, e.g. a limited company, limited partnership, or general partnership
- the number of members has fallen below the minimum legal requirement of two individuals for more than six months – this exposes the remaining LLP member to personal liability for the partnership’s debts
- the LLP was set up for the sole purpose of protecting a name, but it is no longer required
- the business is not feasible
However, applying to strike off an LLP is not an option if the business is insolvent. Even if you close an LLP, creditors can apply to Companies House to have it restored to pursue outstanding debts.
Why would someone object to an LLP’s striking off application?
There are a number of reasons why an interested party may object to an LLP’s striking off and dissolution application. For example:
- the LLP is in breach of one or more of the conditions of its application – e.g. it has changed its name, traded, or become subject to insolvency proceedings in the three-month period prior to or after making the application
- the members of the LLP have not informed interested parties
- action is pending or being made against the LLP to recover money
- legal action is currently being taken against the partnership
- the members have engaged in wrongful trading, tax fraud, or some other offence
Any interested party can make an objection or complaint by writing to Companies House and providing supporting evidence – e.g. invoices proving that the LLP is trading or has outstanding debts.
Can I withdraw an application to dissolve an LLP?
If you or any other member of the LLP change your mind after making an application to dissolve an LLP, you can apply to withdraw the striking off action by filing Companies House form LL DS02 online or by post.
Can I make my LLP dormant instead of dissolving it?
If you have any doubts about voluntarily dissolving your LLP, you may wish to consider making it dormant instead.
Provided that the business has at least two members and is not subject to insolvency proceedings, you can keep the LLP in existence after ceasing trading.
To make your LLP dormant, you must notify HMRC as soon as possible by contacting the Self Assessment department. Thereafter, you will need to:
- maintain a registered office address
- file an annual confirmation statement
- prepare dormant LLP accounts for Companies House each year
- keep statutory LLP registers up to date
- report any changes to the LLP’s details to Companies House
Your LLP can remain dormant for any length of time and, if need be, you can resume trading through the business at any time in the future.
Can I restore a dissolved LLP?
When you dissolve an LLP, it is struck off the public register at Companies House and ceases to exist. If you wish to restore (restart) an LLP that you chose to dissolve voluntarily, you will need to make an application to the Court. Typically, you can apply to restore an LLP if you are one of the following:
- a former member, creditor, or liquidator
- a person who had a contractual relationship with the LLP
- someone who had a potential legal claim against the LLP
- any person who had an interest in land or other property in which the LLP also had an interest, right, or obligation
- a manager or trustee of the LLP’s former employees’ pension fund
- any other person who appears to the Court to have an interest in the matter
Generally, you can apply for restoration by court order up to six years after the date of dissolving an LLP.
If the Court approves the application, Companies House will restore the LLP with the same name if it is still available for use. Otherwise, you will need to choose a new LLP name.
How much does it cost to dissolve an LLP?
To make an application to Companies House to dissolve an LLP, you must pay a non-refundable fee of £10. You can pay this online, or by cheque or postal order if you are applying by post using form LL DS01.
How long does it take to dissolve a limited liability partnership?
It takes at least three months to dissolve a limited liability partnership, from the time of application to the date of striking off and dissolution. This is because Companies House must allow three months for interested parties to make objections to the striking off application.
However, the length of time that it takes to dissolve an LLP can vary greatly. It depends on a range of factors, including the application filing method (i.e. online or by post), Companies House current workload and processing times, and whether any objections are made.
You will also face problems and delays if the LLP engages in any prohibited activities in the three-month period prior to making the application.
The dissolution process cannot be rushed. It requires careful planning and execution to ensure that no mistakes are made.
Is an LLP name protected after dissolution?
Upon dissolution of an LLP, the registered name of the business is no longer protected. This means that another LLP or company can legally register and use the name of a dissolved LLP or limited company.
If you want to protect the existing name of your LLP but no longer wish to trade, you should consider making the LLP dormant instead of dissolving it.
How long do dissolved LLP details remain on the Companies House register?
When you dissolve an LLP, the partnership’s details will remain on the public register at Companies House for 20 years. This includes the:
- certificate of incorporation
- registered office address
- name and service address of every LLP member
- name and service address of every person with significant control (PSC)
- PDF copies of all Companies House filings, including confirmation statements and LLP accounts
After 20 years, Companies House will transfer a selection of dissolved LLP records to The National Archives.
1st Formations LLP Dissolution Service
At 1st Formations, we provide a professional dissolution service for LLPs registered in any UK jurisdiction, including England & Wales, Scotland, and Northern Ireland.
Our dedicated team of company formation experts will take of everything, explaining the process and ensuring that your LLP is closed in the right way.
How does it work?
- Visit our Company Dissolution Service page (this service is suitable for LLPs)
- Select ‘Buy Now’, complete the order form, proceed to checkout, and pay online
- We will send your LLP members’ resolution by email within 3-5 working hours – you should sign it and store it for safekeeping
- The LLP members will receive an invitation by email to electronically sign the dissolution application – simply sign it and submit it online
- We will securely deliver the required documents to Companies House online
- We will inform you by email when Companies House accepts the application to dissolve the LLP
- Companies House will notify you in writing at your registered office address when the LLP has been successfully dissolved
Our LLP Dissolution Service is available for £69.99 and includes:
- the Companies House filing fee
- completion and filing of form LL DS01 – Striking off application by an LLP
- members’ resolution to approve the dissolution
- continued use of our London registered office and service address until your LLP is struck off and dissolved
This invaluable service provides peace of mind that your LLP dissolution application is correctly prepared and filed at Companies House by experienced professionals, helping to minimise the stress of closing down your business.
Thanks for reading
If you have any questions about dissolving an LLP or would like to know more about our LLP Dissolution Service, please leave a comment below or contact our company formation specialists.