Dissolution of a Limited Liability Partnership

Published On: Jun 19, 2019Last Updated: Oct 14, 20233.7 min read

Dissolution basically means formally ending or dismissing a partnership or official body. It is the process of dissolving or being dissolved, which means the process of disintegration. But in the legal context, dissolution has multiple meanings. 

Dissolution of LLP is the stage of liquidation through which it is brought to an end. The assets & property of the concerned entity are redistributed.

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Law provides for a formal process to be looked after for dissolution of registered entities like company, LLP, etc.

Types of LLP dissolution 

The winding up of an LLP may be done in the following ways: 

  1. Declaring LLP as Defunct   
  2. Winding up as going concern.

It includes;

A. Voluntary Winding up

Under this, the partners may between themselves decide to stop and wind up the operations and close a Limited Liability Partnership.  

A resolution approved by 3/4th of the total number of partners has to be passed. A copy of Resolution has to be filed with the Registrar in Form 1 within 30 days of passing the Resolution and a copy of such authorisation has to be given to the person appointed for taking care of the wind up.  

B. Compulsory Winding up

Compulsory winding up is a process by which the tribunal orders the winding up and dissolution of LLP for the reasons mentioned below: 

◦   if an LLP decides that LLP be wound up by the Tribunal;
◦   if, for a period of more than six months, the number of partners of the LLP is reduced below two; 
◦   if an LLP is unable to pay its debts;
◦   if an LLP has acted against the interests of the sovereignty and integrity of India, the security of the State or public order;
◦   if an LLP has made a default in filing with the Registrar the Statement of Account and Solvency or annual return for any five consecutive financial years; or
◦   if a Tribunal is of the opinion that it is just and equitable that the LLP be wound up.

C. Winding up with Creditors

  • Majority of partners need to make an announcement in Form-2 stating that they have no sum unpaid or they will pay their debts within an assured time period  as fixed by the partners but not exceeding more than a year from the date of passing of the resolution for the sake of winding up.
  • Publication of Resolution: Within 14 days of passing of Resolution for winding up and receiving the consent from the creditors, LLP should get an advertisement published regarding the resolution of winding up in a newspaper circulating in the territory where the principal place or registered office of LLP is located.
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The dissolution process can be divided into 3 parts:- 

A. Resolutions and affidavits

The first step for the voluntary dissolution is to pass a resolution of partners and creditors. After that, all of the partners shall sign an affidavit, bond along with other necessary documents and to file form for striking off an LLP with MCA.

B. Appointment of Liquidator and Liquidation report (not applicable for defunct LLP)

A Liquidator must be appointed by the LLP within 30 days of passing the resolution in consultation with the creditors if any. The liquidator will carry out all the necessary functions & duties and thereby generate a liquidation report, affecting dissolution, containing the exact manner in which winding up would be carried out. This report will be sent to the registrar along with the resolution of acceptance of the liquidation & valuation report. 

C. Dissolution by Tribunal

Along with the reports mentioned above, an application will be moved to the tribunal for dissolution. If the tribunal is satisfied with the process followed for winding up, it will pass the necessary order whereby LLP shall stand dissolved. The liquidator then will file such order with the registrar.

Lastly, if registrar thinks fit, the registrar would publish the notice of such winding up/strike off of an LLP in its Official Gazette stating dissolution of the LLP. If it did not receive any objection in 30 days then the registrar will dissolve or strike off an LLP.  


The dissolution of LLP is a two-way process requiring ample documents filing & process fulfilment. At LegalWiz we can take the responsibility to make all your processes stress-free, smooth & prompt with our professional assistance.  

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Zeel Kansara
About the Author

Zeel Kansara

Zeel kansara is a Company secretary pursuing her Internship at LegalWiz.in with deep indulgence towards content writing. She also holds degree of Bachelor's of Commerce and is currently pursuing Bachelor's in Law.