Interpretation

conversion

In this Conversion Schedule, unless the context otherwise requires,-

  • “Company” means a private company as defined in Clause (3) of Sub-section (1) of Section 3 of the Companies Act, 1956 ;
  • “Convert”, in accordance with a private company changing into a limited liability partnership, means a transfer of their entire property, asserts, interests, rights, privileges, liabilities, obligations of organisation and the undertaking of the private company to the limited liability partnership in accordance with this Schedule.

Eligibility for Conversion of private companies into LLP

  • A company may convert into a limited liability partnership by complying with the requirements as to the conversion set out in this Schedule.
  • A company may apply to convert into a limited liability partnership in accordance with this Schedule if and only if-
  • there is no security interest in its asserts subsisting or in force at the time of application; and
  • the partners of the limited liability partnership to which it converts comprise all the shareholders of the company and no one else.
  • Upon such kind of conversion, the company, and its shareholders, the limited liability partnership into which the company has altered and the partners of that limited liability partnership shall be hurdle by the provisions of this Schedule that are applicable to their entire organisation.

Statements to be filed for conversion

conversion

A company may apply to convert into a limited liability partnership by filing with the Registrar-

  • a statement by all its shareholders in such form and manner to be accompanied by such fees as the Central Government may prescribe, containing the following particulars, namely;-
  • the name and registration number of the company;
  • the date on which the company was incorporated; and
  • incorporation document and statement referred to in section 11.

Registration of conversion

On receiving the documents referred to in paragraph 3, the Registrar may, respect to the provisions of this Companies Act and the rules produced there under, register the relating documents and issue a certificate of company registration in such form as the Registrar shall, find stating that the limited liability partnership is, on and from the date mentioned in the certificate, registered under this Act:

Given  that the limited liability partnership may, within the given time limit for example 15 days of the company registration, intimates  the concerned Registrar of Companies with which it was registered under the provisions of the Companies Act, 1956 and mentioned about the conversion and of the particulars of the limited liability partnership in such required form and manner as the central Government may be specified.

Registrar may refuse to register

conversion

Nothing in this Schedule shall be construed as to require the Registrar ton register any limited liability partnership if he is not satisfied with the particulars or other information furnished under the provisions of this Act.

  1. Provided that an appeal may be made before the Tribunal in case of refusal of registration by the Registrar.
  2. Provided further that until the Tribunal is constituted under the Companies Act, 1956, the appeal under this sub-paragraph may be made before the Company Law Board.
  3. The Registrar may, in any appropriate case, need the documents which is reference to in paragraph 3 to be verified in such manner, as he considers fit.

Effect of Registration

On and from the date of registration of conversion specified in the certificate of  business registration issued under paragraph 4-

  • there shall be a limited liability partnership by the name specified in the certificate of business registration registered under this Act;
  • all tangible (movable or immovable) and intangible property vested in the company, all asserts, interests, rights, privileges, liabilities, obligations relating to the company and the whole of the undertakings of the company shall be transferred to and shall vest in limited liability partnership without further assurance, act or deed; and
  • the company shall be deemed to be dissolved and removed from the records of the Registrar of Companies.

Registration in relation to the Conversion property

conversion

If any conversion property to which clause (b) of paragraph 6 applies is registered with any authority, the limited liability partnership shall, as soon as practicable, after the date of business 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 liability partnership in such form and manner as the authority may determine.

Pending proceedings

All proceedings by or against the company which are pending before any Court, Tribunal or other authority on the date of business registration may be continued, completed and enforced by or against the limited liability partnership.

Continuance of conviction, ruling, order of judgement

Any conviction, ruling, order or judgement of any court, Tribunal or other authority in favor of or against the company may be enforced by or against the limited liability partnership.

Existing Agreements of Conversion

conversion

Every agreement to which the company was a party immediately before the date of business 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 company; and
  • for any reference to the company, there were substituted in respect of anything to be done on or after the date of registration a reference to the limited liability partnership.
Existing contracts for conversion

All deeds, contacts, schemes, bonds, agreements, applications, instruments and arrangements subsisting immediately before the date of company registration relating to the company or to which is a party shall continue in force on and after that date as if they relate to the limited liability partnership as if the limited liability partnership and shall be enforceable by or against the limited liability partnership as if the limited liability partnership as if the limited liability partnership were named therein or were a party thereto instead of the company.

Continuance of employment

Every contract of employment to which paragraph 10 or paragraph 11 applies shall continue in force on or after the date of company registration as if the limited liability partnership were the employment there under instead of the company.

Existing Appointment, authority or power

conversion

  1. Every appointment of the company in any role or capacity
  2. which is in force immediately before the date of company registration shall take effect and operate from that date as if the limited liability were appointed.
  3. Any conversion authority or power conferred on the company which is in force immediately before the date of company registration shall take effect and operate from that date as if it were conferred on the limited liability partnership.

Application of paragraph 6 to 13

The provisions of section 6 to 13 (both inclusive) shall apply to any approval, permit or license issued to the company under any other Act which is in force immediately before the date of business registration of the limited liability partnership, subject to the provisions of such other Act under which such approval, permit or license has been issued.

Notice of conversion in correspondence

conversion

  1. The limited liability partnership shall ensure that for a period of twelve months commencing not later than fourteen days after the date of required business registration, every official correspondence of the limited liability partnership bears the following, namely a statement that it was, as from the date of business registration, converted from a company into a limited liability partnership; and the name and registration number of the company from which it is gone under conversion.
  2. Any liability partnership which contravenes the provisions of sub-paragraph(1) shall be punishable with the cost fine which shall not be less than rupees ten thousand but which may extend to one lakh rupees and with a further fine but which may extend to five hundred rupees for every day after the first day after which the default continues.

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