Conversion of a private company into an LLP

Conversion of a private company (s. 56 and the Third Schedule; the question names the Second Schedule, which governs conversion of a firm):

1. "Convert" means the transfer of the company's property, assets, interests, rights, privileges, liabilities, obligations and undertaking to the LLP (para 1).
2. A private company may apply to convert only if no security interest in its assets subsists at the time of application, and the partners of the LLP comprise all its shareholders and no one else (para 2).
3. The company files with the Registrar a statement by all its shareholders with its name, registration number and date of incorporation, and the incorporation document and statement referred to in section 11 (para 3).
4. The Registrar registers the documents and issues a certificate of registration stating the date of registration (para 4).
5. If the Registrar is not satisfied with the particulars or other information furnished, he may refuse to register the LLP; an appeal against the refusal lies to the Tribunal (para 5).

Effects of conversion (para 6): there is an LLP by the name in the certificate; all the company's property, assets, rights, liabilities and undertaking vest in the LLP without further assurance; and the company is deemed dissolved and removed from the records of the Registrar of Companies. Within fifteen days the LLP informs the Registrar of Companies, pending proceedings continue by or against the LLP, and the LLP must inform any authority with which the company's property is registered. Further:

• any conviction, ruling, order or judgment for or against the company may be enforced by or against the LLP (para 9);
• the company's agreements have effect as if the LLP were the party; its deeds, contracts and instruments continue in force and are enforceable by or against the LLP; and its contracts of employment continue with the LLP as employer (paras 10 to 12);
• every appointment of the company, and any authority or power conferred on it, operates as if made in or conferred on the LLP (para 13), and the same applies to approvals, permits and licences issued to it under other Acts, subject to the provisions of the Act under which each was issued (para 14);
• for twelve months, beginning not later than fourteen days after the date of registration, the LLP's official correspondence must state that it was converted and give the company's name and registration number, on pain of a fine of ₹10,000 to ₹1 lakh and a daily fine (para 15).