# Winding Up and Dissolution of LLP [Sections 63 – 65]

## Modes of Winding Up [Section 63]

Winding up of an LLP can be:

1. Voluntary, OR

2. By the Tribunal.

After being wound up, the LLP may be dissolved.

Note: Winding up ≠ Dissolution. Winding up is the process; dissolution is the end.

## Circumstances for Winding Up by Tribunal [Section 64]

The Tribunal may wind up an LLP on ANY of the following grounds:

#	Ground
1	The LLP itself decides to be wound up by the Tribunal.
2	The number of partners is reduced below two for a period of more than 6 months.
3	The LLP is unable to pay its debts.
4	The LLP has acted against the sovereignty and integrity of India, security of the State or public order.
5	The LLP has defaulted in filing Statement of Account and Solvency OR Annual Return for any 5 consecutive financial years.
6	The Tribunal is of the opinion that it is just and equitable that the LLP be wound up.

### Mnemonic — "D-2-D-S-5-J"

Decision by LLP
2 — partners below 2 for > 6 months
Debts unpaid
Sovereignty/security violated
5 consecutive years of filing default
Just and equitable

## Rules for Winding Up [Section 65]

The Central Government is empowered to make rules in relation to winding up and dissolution of LLP.

## Key Takeaway

LLP winding up has 6 specific grounds before the Tribunal, ranging from voluntary trigger to public-interest grounds (security of State) to chronic non-compliance (5 years of default).

Worked example

### Example 1

Example 1 (Below 2 partners): A 2-partner LLP loses one partner on 01-Jan-2025. As of 02-Jul-2025, no second partner has been admitted. 6 months has elapsed → ground under S.64(2) is satisfied; Tribunal may wind up.

### Example 2

Example 2 (Filing default): PQR LLP has not filed Statement of Account & Solvency for FY 2018-19, 2019-20, 2020-21, 2021-22 and 2022-23. → 5 consecutive years of default — Tribunal may order winding up under S.64(5).

### Example 3

Example 3 (Inability to pay debts): A creditor of XYZ LLP holding an undisputed debt of ₹50 lakh issues statutory demand, but LLP fails to pay. This triggers ground (3) — unable to pay debts.

⚠️ Common exam mistakes

Treating winding up and dissolution as the same — they are sequential stages.
Forgetting the threshold for partner-reduction ground — it requires BELOW two AND for MORE than 6 months.
Missing that the filing-default ground needs 5 CONSECUTIVE financial years (not aggregate).
Forgetting that 'just and equitable' is a residual ground — courts use it sparingly.
Confusing modes — S.63 says winding up may be voluntary or by Tribunal; S.64 lists ONLY Tribunal grounds.

Bare-Act text Sections 63, 64, 65 · Limited Liability Partnership Act, 2008 · click to expand

Section 63 — Winding up of LLP may be either voluntary or by the Tribunal; LLP so wound up may be dissolved. Section 64 — Circumstances in which LLP may be wound up by Tribunal: (1) LLP decides so; (2) number of partners reduced below two for more than six months; (3) LLP unable to pay debts; (4) LLP acted against sovereignty/integrity of India, security of State or public order; (5) default in filing Statement of Account and Solvency or annual return for 5 consecutive financial years; (6) Tribunal is of opinion it is just and equitable. Section 65 — Central Government may make rules for winding up and dissolution of LLP.

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Winding Up and Dissolution of LLP (Sections 63, 64, 65)

Worked example

⚠️ Common exam mistakes