Question 5
Winding up and dissolution of an LLP; winding up by the Tribunal
18.75 marks
- Time to write
- About 38 minutes
From an older CBCS paper
Question
Question 5 · 18.75 marksQ.5.Distinguish between the winding up and the dissolution of a LLP. State the circumstances in which the tribunal can wind up an LLP.
Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.
Before you write
Read off the question and its marks
Read from the question
- Distinguish betweenSet the differences out in a table, basis by basis, not as two separate essays.
What the paper leaves open
The paper prints no mark per question (any four of six, equal marks, 75 in all); each question is reckoned here at 18.75 marks. This older-course question examines the winding up of an LLP, which the current UGCF Business Laws syllabus does not name; it is answered as printed.
Write it in this order
- Read; underline the asks; jot your points 2 min
- 1 Winding up and dissolution distinguished (section 63) 8 marks 15 min
- 2 Circumstances for winding up by the Tribunal (section 64) 8 marks 14 min
- 3 Rules (section 65); conclusion 2.8 marks 5 min
- Check: every ask answered, key terms underlined 2 min
Short on time? Trim steps 1–3 evenly rather than skip one: each is capped at its own marks.
Try it first. About 38 minutes for 18.75 marks. Write it out, then open the solution.
Solution
Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.
Winding up and dissolution distinguished. Section 63 of the Limited Liability Partnership Act, 2008 provides that the winding up of an LLP may be either voluntary or by the Tribunal, and that an LLP so wound up may be dissolved. Winding up is therefore the process and dissolution its end.
| Basis | Winding up | Dissolution |
|---|---|---|
| Nature | The process of closing the LLP's affairs: realising its property, paying its debts, distributing any surplus | The end of the LLP's legal existence, which follows the winding up |
| Order | First | Last: an LLP "so wound up may be dissolved" (s. 63) |
| Legal existence | The LLP continues to exist while it is wound up | The LLP ceases to exist |
| Mode | Voluntary, or by the Tribunal (s. 63) | Follows the winding up, on the final accounts |
| Who acts | A liquidator conducts the winding up | The dissolution closes it |
Circumstances in which the Tribunal may wind up an LLP (section 64):
- the LLP decides that it be wound up by the Tribunal;
- for a period of more than six months, the number of its partners is reduced below two;
- it has acted against India's sovereignty and integrity, the security of the State or public order;
- it has failed, for any five financial years in a row, to file its Statement of Account and Solvency or its annual return with the Registrar; or
- the Tribunal considers it just and equitable to wind up the LLP.
The former ground of inability to pay debts (clause (c)) was omitted by the Insolvency and Bankruptcy Code, 2016. The Central Government may make rules for winding up and dissolution (section 65).
Conclusion. Winding up is the process that closes an LLP's affairs; dissolution is the end of its existence that follows. The Tribunal winds up an LLP only on one of the grounds in section 64.
Where the 18.75 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | Winding up and dissolution distinguished (section 63) | 8 |
| 2 | Circumstances for winding up by the Tribunal (section 64) | 8 |
| 3 | Rules (section 65); conclusion | 2.75 |
| Total | 18.75 |
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