Business Laws and Ethics · Limited Liability Partnership Act, 2008

Winding Up and Dissolution of an LLP

Updated 10 October 2026 · Fact-checked

Winding up is the process of closing an LLP's affairs. Under section 63 it is either voluntary or by the Tribunal, and the LLP may then be dissolved. Section 64 lists the grounds for Tribunal winding up. Separately, section 75 lets the Registrar strike off a defunct LLP after giving it a hearing.

Understand Winding Up and Dissolution of LLP

An LLP is a separate legal entity. It does not end just because partners stop working or leave. It must be closed through a legal route. The Act gives you three routes you must know for the exam.

Section 63 says winding up of an LLP may be either voluntary or by the Tribunal, and an LLP so wound up may be dissolved. Winding up is the process of closing affairs. Dissolution is the end of the LLP's legal existence. Keep the two words apart in your answers.

Section 64 lists when the Tribunal may wind up an LLP. The word is "may", so the Tribunal has discretion. The grounds are: the LLP decides to be wound up by the Tribunal; partners reduced below two for more than six months; acting against the sovereignty and integrity of India, the security of the State or public order; default in filing the Statement of Account and Solvency or annual return with the Registrar for any five consecutive financial years; and the Tribunal's opinion that it is just and equitable. Clause (c) was omitted in 2016, so the list jumps from (b) to (d).

Section 75 is different. It is the Registrar's administrative power to strike a defunct LLP off the register. The Registrar must have reasonable cause to believe the LLP is not carrying on business or operation. The name is struck off in the prescribed manner, and only after the LLP gets a reasonable opportunity of being heard.

Two supporting provisions help in written answers. Section 61(2): if a compromise or arrangement sanctioned under section 60 cannot be worked satisfactorily, the Tribunal may order winding up, and that order is deemed made under section 64. Section 65 lets the Central Government make rules on winding up and dissolution.

Key rules to remember

Modes of winding up: Winding up = voluntary OR by the Tribunal (section 63); An LLP so wound up may be dissolved.
Tribunal grounds (section 64): (a) LLP's own decision; (b) partners below two for more than six months; (d) against sovereignty, integrity, security of State or public order; (e) default in filing Statement of Account and Solvency or annual return for any five consecutive financial years; (f) just and equitable; Clause (c) omitted w.e.f. 15-11-2016. The Tribunal may wind up, it is not bound to.
Strike off (section 75): Registrar's reasonable cause to believe LLP is not carrying on business or operation + reasonable opportunity of being heard → name struck off; Done in the prescribed manner.
Failed compromise (section 61(2)): Compromise under section 60 unworkable → Tribunal may order winding up, deemed under section 64; Tribunal may act on its own motion or on application of an interested person.

How to solve Winding Up and Dissolution of LLP questions

Use this method for any question on closing an LLP, whether theory, a short note or a case scenario.

1Identify the route: voluntary winding up, Tribunal winding up, or Registrar's striking off.
2If the facts show a Tribunal case, match them to a clause of section 64: partner count, default period, public interest, own decision or just and equitable.
3Check the numbers exactly: more than six months for partners below two, and five consecutive financial years for filing default.
4If the facts show an inactive LLP with no business, apply section 75 and state the need for a hearing.
5Mention that the Tribunal's power is discretionary ("may").
6State the result in one line, and separate winding up from dissolution.
7Cite the section numbers you are sure of, and keep the answer short.

Quickest way: Keyword-to-route matching

When to use it: For MCQs and short scenario questions where you have under two minutes.

Spot the trigger word: "six months", "five consecutive years", "public order", "just and equitable", "not carrying on business".
Six months, five years, public order or just and equitable means section 64, Tribunal.
Not carrying on business or operation means section 75, Registrar, hearing first.
Check the number in the option against the Act, since options often swap six months and five years.
Eliminate any option that says the Tribunal "must" wind up.

Common mistakes in Winding Up and Dissolution of LLP

Saying the LLP is wound up if partners fall below two, with no time condition.
Students remember the rule but drop the period.
Fix: Write: reduced below two for a period of more than six months.
Writing that default for any five years, not necessarily consecutive, is a ground.
The word consecutive is skipped when reading fast.
Fix: Section 64(e) says any five consecutive financial years, covering the Statement of Account and Solvency or annual return.
Listing clause (c) of section 64 as a ground.
Older notes still show it.
Fix: Clause (c) was omitted in 2016. Do not quote it.
Striking off an LLP without a hearing.
Students treat it as automatic once the LLP is inactive.
Fix: The proviso to section 75 requires a reasonable opportunity of being heard before striking off.
Using winding up and dissolution as the same thing.
Both words are used loosely in daily talk.
Fix: Section 63: winding up is voluntary or by the Tribunal, and the LLP so wound up may be dissolved.

Worked examples

Example 1

Mehta & Rao LLP has had only one partner since 1 January 2026. On 15 September 2026 a creditor asks whether the Tribunal can wind it up on this ground. Advise.

Show the solution

The relevant ground is section 64(b): the number of partners is reduced below two for a period of more than six months.
Period from 1 January 2026 to 15 September 2026 is about 8.5 months, which is more than six months.
The condition is met, so the Tribunal has power to wind up the LLP.
The power is discretionary: the Act says the Tribunal "may" wind up.

Answer: Yes. The LLP has had fewer than two partners for more than six months, so the Tribunal may wind it up under section 64(b).

Example 2

Sunrise Traders LLP has not filed its Statement of Account and Solvency or annual return for the last four financial years and has carried on no business. Can the Registrar strike it off? Can the Tribunal wind it up for the default?

Show the solution

Tribunal ground: section 64(e) needs default for any five consecutive financial years. Here the default is four years, so this ground is not yet met.
Registrar's power: section 75 applies where the Registrar has reasonable cause to believe the LLP is not carrying on business or operation.
Since no business is carried on, the Registrar may proceed, but must first give the LLP a reasonable opportunity of being heard.
The name is then struck off in the prescribed manner.

Answer: The Tribunal cannot wind it up under section 64(e) because the default is only four years. The Registrar may strike off the name under section 75 after giving a reasonable hearing.

Exam tips

Learn the section 64 clauses as a short list with their numbers: six months and five consecutive financial years are the favourite MCQ traps.
For a 14-mark answer, structure it as: meaning (section 63), Tribunal grounds (section 64), striking off (section 75), then the section 61(2) link.
In scenario questions, quote the facts against the clause, then give a one-line conclusion.
Note that clause (c) of section 64 is omitted, which can be tested as a statement-true-or-false MCQ.

Practice questions from Limited Liability Partnership Act, 2008

Winding Up and Dissolution of LLP in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Winding Up and Dissolution of LLP: frequently asked questions

What are the grounds for winding up of an LLP by the Tribunal?

Section 64 lists them: the LLP's own decision, partners below two for more than six months, acting against India's sovereignty, security or public order, default in filing for five consecutive financial years, and just and equitable grounds. Clause (c) has been omitted.

Can the Registrar strike off an LLP under section 75 without notice?

No. The Registrar must have reasonable cause to believe the LLP is not carrying on business or operation. Before striking off, the LLP must be given a reasonable opportunity of being heard.

What is the difference between winding up and dissolution of an LLP?

Winding up is the process of closing the LLP's affairs, either voluntarily or by the Tribunal. Under section 63, an LLP so wound up may be dissolved, which ends its existence.

Who makes the rules on winding up and dissolution of LLPs?

Section 65 empowers the Central Government to make rules on winding up and dissolution. Section 79(2) also mentions rules for the manner of striking off names under section 75.