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TMI BlogCONVERSION OF FIRM INTO LIMITED LIABILITY PARTNERSHIPX X X X Extracts X X X X X X X X Extracts X X X X ..... CONVERSION OF FIRM INTO LIMITED LIABILITY PARTNERSHIP - By: - Mr. M. GOVINDARAJAN - Corporate Laws / IBC / SEBI - Dated:- 9-12-2008 - - The Limited Liability Partnership Bill, 2008 ('Bill' for short) provides for the conversion of firm into limited liability partnership, conversion of private company into limited liability partnership and conversion of unlisted company into limited liability partnership in accordance with the provisions in Chapter X and second schedule, third schedule and fourth schedule respectively. This article will highlight the procedure involved in the conversion of firm into limited liability partnership. Sec. 55 of the bill provides for the conversion of firm into limited liability partnership. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A firm may convert into a limited liability partnership in accordance with the provisions of Chapter X and the second schedule. The term 'convert' in relation to a firm converting into a limited liability partnership means a transfer of the property, assets, interests, rights, privileges, liabilities, obligations and the undertaking of the firm to the limited liability partnership in accordance with the second schedule. PROCEDURE: 1. A firm may apply to convert into a limited liability partnership if and only if the partners of the limited liability partnership into which the firm is to be converted, comprise, all the partners of the firm and no one else; 2. A statement by all of its partners in such form and manner and accompan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied by such fee as the Central Government may prescribe, containing the following particulars, namely: The name and registration number, if applicable, of the firm; and The date on which the firm was registered under the Indian Partnership Act, 1932 or under any other law, if applicable; and Incorporation document and statement required to register a limited liability partnership is to be filed with the Registrar. 3. The Registrar on receipt of the documents shall subject to the provisions of the Act, register the documents and issue a certificate of registration in such form as the Registrar may determine, stating that the limited liability partnership is, on the date specified in the certificate, registered under this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. 4. The Registrar, if he is not satisfied with the particulars or other information, may refuse to register; 5. The Registrar may require the documents to be verified in such manner, as he considers fit; 6. If registration is refused an appeal may be made before the Tribunal; 7. The limited liability partnership shall, within fifteen days of the date of registration, inform, the concerned Registrar of Firms with which it was registered under the provisions of the Indian Partnership Act, 1932 about the conversion and of the particulars of the limited liability partnership in such form as the Central Government may prescribe. EFFECT OF REGISTRATION: 1. On and from the date of registration there shall be a limited liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y partnership by the name specified in the certificate of registration registered under this Act; 2. All tangible property as well as intangible property vested in the firm, all assets, interests, rights, privileges, liabilities, obligations relating to the firm and the whole of the undertaking of the firm shall be transferred to and shall vest in the limited liability partnership without further assurance, act or deed; 3. The firm shall be deemed to be dissolved and if earlier registered under the Indian Partnership Act, 1932 , removed from the records maintained under that Act; 4. All proceedings by or against the firm which are pending in any court or tribunal or before any authority on the date of registration may be continued, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompleted and enforced by or against the limited liability partnership; 5. Any conviction, ruling, order or judgment of any court, tribunal or other authority in favor of or against the firm may be enforced by or against the limited liability partnership; 6. Every agreement to which the firm was a party immediately before the date of registration, whether or not of such nature that the rights and liabilities there under could be assigned, shall have effect as from that date as if the limited liability partnership were a party to such an agreement instead of the firm and for any reference to the firm, there were substituted in respect of anything to be done on or after the date of registration a reference to the limited liability partners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hip; 7. All deeds, contracts, schemes, bonds, agreements, applications, instruments and arrangements subsisting immediately before the date of registration relating to the firm or to which the firm is a party, shall continue in force on and after that date as if they relate to the limited liability partnership and shall be enforceable by or against the limited liability partnership as if the limited liability partnership were named therein or where a party thereto instead of the firm; 8. Every contract of employment to which the agreements or contracts applies shall continue to be in force on or after the date of registration as if the limited liability partnership were the employer there under instead of the firm; 9. Every appointme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the firm in any role or capacity which is in force immediately before the date of registration shall take effect and operate from that date as if the limited liability partnership were appointed; 10. Any authority or power conferred on the firm which is in force immediately before the date of registration shall take effect and operate from that date as if it were conferred on the limited liability partnership. OBLIGATIONS AND LIABILITIES: 1. If any property is registered with any authority, the limited liability partnership shall, as soon as practicable after the date of registration, take all necessary steps as required by the relevant authority to notify the authority of the conversion and of the particulars of the limited l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iability partnership in such medium and form as the authority may specify; 2. Every partner of a firm that has converted into a limited liability partnership shall continue to be personally liable (jointly and severally with the limited liability partnership) for the liability and obligations of the firm which were incurred prior to the conversion or which arose from any contract entered into the conversion; 3. If any such partner discharges any liability or obligation he shall be entitled, subject to any agreement with the limited liability partnership to the contrary, to be fully indemnified by the limited liability partnership in respect of such liability or obligation; 4. The limited liability partnership shall ensure that for a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod of twelve months commencing not later than fourteen days after the date of registration, every official correspondence of the limited liability partnership bears the following: A statement that it was, as from the date of registration, converted from a firm into a limited liability partnership; and The name and registration number, if applicable, of the firm from which it was converted; - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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