Effects of converting a firm

Effects of converting a partnership firm (Second Schedule to the LLP Act, 2008). On and from the date of registration stated in the certificate:

1. A new LLP: there is an LLP by the name specified in the certificate (para 7).
2. Property and liabilities pass: all the firm's tangible and intangible property, assets, interests, rights, privileges, liabilities and obligations, and the whole of its undertaking, are transferred to and vest in the LLP without any further assurance, act or deed (para 7).
3. The firm ends: the firm is deemed dissolved and, if it was registered under the Indian Partnership Act, 1932, removed from the records kept under that Act (para 7).
4. Registered property: the LLP must notify any authority with which such property is registered of the conversion (para 8).
5. Proceedings and judgments: proceedings pending by or against the firm may be continued and enforced by or against the LLP, and any conviction, ruling, order or judgment for or against the firm may be enforced by or against the LLP (paras 9, 10).
6. Agreements, contracts and employment: the firm's agreements, deeds, contracts and instruments continue as if the LLP were the party instead of the firm, and every contract of employment continues with the LLP as the employer (paras 11 to 13).
7. Appointments, powers, approvals and licences: every appointment of the firm, and any authority or power conferred on it, operates as if made in or conferred on the LLP; the same applies to any approval, permit or licence issued to the firm under another Act, subject to that Act (paras 14, 15).
8. Partners' existing liabilities: every partner of the firm remains personally liable, jointly and severally with the LLP, for the firm's liabilities and obligations incurred before the conversion or arising from a contract made before it; a partner who discharges any of them is entitled, unless otherwise agreed, to be fully indemnified by the LLP (para 16).
9. Notice in correspondence: for twelve months, starting not later than fourteen days after registration, every official correspondence of the LLP must state that it was converted from a firm, and give the firm's name and registration number, if any; a default is punishable with a fine of ₹10,000 to ₹1 lakh, and a further fine for every day it continues (para 17).