# Winding Up and Dissolution [Sections 63–65]

## Modes of Winding Up

A LLP may be wound up either:

1. Voluntarily, OR

2. By the NCLT

A wound-up LLP may then be dissolved.

## Circumstances Where NCLT May Wind Up an LLP

NCLT may order winding up if any one of the following exists:

Circumstance
LLP itself decides to be wound up by NCLT
Number of partners reduced below 2 for more than 6 months
LLP acted against sovereignty & integrity of India, security of state or public order
LLP made default in filing Statement of Account & Solvency OR Annual Return with ROC for 5 consecutive FYs
NCLT is of opinion that it is just & equitable to wind up

## CG's Rule-Making Power

The Central Government may make rules for the winding up and dissolution of LLPs.

Worked example

### Example 1

Q: XYZ LLP had 3 partners. Two left on 1-Jan-2026. As of 15-Sep-2026, no new partners have joined. Can NCLT wind it up?

A: Yes. The number of partners has been below the minimum of 2 for more than 6 months (from 1-Jan-2026 to 15-Sep-2026 ≈ 8 months). This is a ground for NCLT winding up under Section 64.

### Example 2

Q: ABC LLP has not filed its Statement of Account & Solvency for FYs 2020-21 to 2024-25. Can NCLT wind it up?

A: Yes. Default in filing Statement of Account & Solvency (or Annual Return) for 5 consecutive financial years is a specified ground for winding up by NCLT.

⚠️ Common exam mistakes

Stating the partner-shortfall trigger as 'below 2 partners' alone — the shortfall must continue for more than 6 months.
Confusing the default trigger as '5 years' generally — it is specifically '5 consecutive FYs' default in filing Statement of Account & Solvency OR Annual Return.

Bare-Act text Sections 63 to 65 · The Limited Liability Partnership Act, 2008 · click to expand

Section 63 - Winding up and dissolution: The winding up of a LLP may be either voluntary or by NCLT and LLP, so wound up may be dissolved. Section 64 - Circumstances in which LLP may be wound up by NCLT. Section 65 - The Central Government may make rules for the provisions in relation to winding up and dissolution of LLPs.

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Winding Up and Dissolution of LLP

Worked example

⚠️ Common exam mistakes