Sections 65 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 65 gives the Central Government the power to make rules for winding up and dissolution of LLPs. Section 66 says a partner may lend money to, and do other business with, the LLP and has the same rights and obligations on those dealings as a person who is not a partner. For help papering a partner loan, see our legal consultation service.
The Central Government may make rules for the provisions in relation to winding up and dissolution of LLPs (s.65). A partner may lend money to and transact other business with the LLP and has the same rights and obligations with respect to the loan or other transactions as a person who is not a partner (s.66). Neither section was amended in 2021, apart from the general replacement of Companies Act references.
Section 65: the power to make winding-up rules
The section reads: "The Central Government may make rules for the provisions in relation to winding up and dissolution of limited liability partnerships." It is a single enabling sentence. The Act itself, in sections 63 and 64, says only that winding up is voluntary or by the Tribunal and lists the grounds for winding up by the Tribunal. Everything else about how it is done is meant to come from rules and from the provisions of the Companies Act that the Central Government applies under section 67.
The same power also appears in the list in section 79(2), where the text covers "in relation to winding up and dissolution of limited liability partnerships under Section 65". Our article on sections 63 and 64 covers the grounds. Our general guide on winding up and dissolution of an LLP covers the practice.
How winding-up rules and notifications fit together
The OCR appendix prints a notification of the Ministry of Corporate Affairs, G.S.R. 6(E) dated 6 January 2010, issued under section 67(1). It applies to LLPs a long list of sections of the Companies Act, 1956 in Part VII (winding up), with modifications: "company" becomes "limited liability partnership", "director" becomes "designated partner", "Court" becomes "Tribunal", and so on. Examples printed in the table include:
| Item | What the printed modification says |
|---|---|
| Section 443 (hearing of petition) | The Tribunal may, within ninety days from presentation of the petition, dismiss it, make an interim order, direct revival or rehabilitation under sections 60 to 62 of the LLP Act, appoint a provisional liquidator, order winding up, or pass other orders |
| Section 445 (copy of winding-up order) | Copy of the order to be filed with the Registrar within fifteen days of the order; default is punishable with fine up to one thousand rupees for each day |
| Section 584 (foreign LLPs) | Replaced with a provision allowing a foreign LLP carrying on business in India to be wound up as an Indian LLP in stated cases |
These are quoted only to show how the winding-up machinery works in practice. The Companies Act, 1956 has since been replaced by the Companies Act, 2013, and the 2021 Act changes references to it, so check the current notifications before relying on any figure. Our article on section 67 discusses the notifications and the need to look for later ones.
Section 66: a partner may deal with the LLP like an outsider
"A partner may lend money to and transact other business with the limited liability partnership and has the same rights and obligations with respect to the loan or other transactions as a person who is not a partner."
Break it into three points:
- Loans and other business are allowed. A partner is not barred from lending to the LLP or from selling goods or services to it.
- Same rights and obligations as an outsider. On the loan or transaction, the partner stands where a stranger would stand: he can claim the debt, enforce the contract and is bound by its terms.
- The rule is limited to the "loan or other transactions". It does not turn the partner's profit share or contribution into a loan. Contribution is dealt with in sections 32 and 33 (see our article on contribution of a partner).
The section does not say what happens in a winding up where a partner is also a creditor. The text is silent on priority, set-off and interest rate; those depend on the contract, the LLP agreement, the applied winding-up provisions and any rules. Check them for a specific case.
Practical handling
- Put the loan in writing, with the amount, rate (if any), repayment terms and security (if any).
- Record the approval in line with the LLP agreement; if there is no agreement or it is silent, the First Schedule decides how decisions are taken (see our article on the First Schedule).
- Keep the loan separate in the books from capital contribution.
- For tax treatment of interest to partners, see our income-tax guides.
Example. Anita, a partner in Rao & Co LLP, lends the LLP a sum to buy equipment and signs a loan agreement. Under section 66 she holds the same rights on that loan as a bank would. Her share of profits and her capital contribution are separate matters under the LLP agreement.
Need help with partner funding?
Whether to fund an LLP by capital or by a loan from a partner affects rights on exit and on winding up. Our legal consultation team can help you document the arrangement and align it with your LLP agreement.
Key takeaways
- Section 65 lets the Central Government make rules on winding up and dissolution.
- Detail on winding up comes from rules and from Companies Act provisions applied under section 67.
- A partner may lend money to and do other business with the LLP (s.66).
- On the loan or other transaction the partner has the same rights and obligations as a non-partner.
- The text is silent on priority in winding up; check the rules.
Read next
- Sections 63–64: winding up and grounds for winding up by Tribunal
- Section 67: application of Companies Act provisions
- LLP Settlement of Account on Dissolution
- Extent of Liability of LLP and Partners
Disclaimer: Based on the Limited Liability Partnership Act, 2008 as amended by the Limited Liability Partnership (Amendment) Act, 2021, as consulted on 1 October 2026. Forms, fees and procedure are set by the LLP Rules, 2009 as amended from time to time. This article is general information, not legal advice; check the official text before acting.