Question 3 OR (b)
Conversion of a private company into an LLP
10 marks
- Time to write
- About 20 minutes
From an older CBCS paper
Question
Question 3 OR (b) · 10 marksDiscuss the process of conversion in to LLP from a private company.
Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.
Before you write
Read off the question and its marks
Read from the question
- processA process: the steps in order, one heading each.
Write it in this order
- Read; underline the asks; jot your points 1 min
- 1 Section 56 and eligibility 3 marks 5 min
- 2 Filing, registration and refusal 4 marks 7 min
- 3 Effect of registration 3 marks 5 min
- Check: every ask answered, key terms underlined 2 min
Short on time? Trim steps 1–3 evenly rather than skip one: each is capped at its own marks.
Try it first. About 20 minutes for 10 marks. Write it out, then open the solution.
Solution
Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.
Rule. Section 56 of the LLP Act, 2008 allows a private company to convert into an LLP in accordance with the Third Schedule. "Convert" means the transfer of the company's property, assets, interests, rights, privileges, liabilities, obligations and undertaking to the LLP (para 1).
- Eligibility (para 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 the shareholders of the company and no one else.
- Statements to be filed (para 3). A statement by all its shareholders giving the company's name, registration number and date of incorporation, with the incorporation document and statement referred to in section 11.
- Registration (para 4). The Registrar registers the documents and issues a certificate of registration; within fifteen days the LLP informs the Registrar of Companies.
- Refusal (para 5). The Registrar may refuse if not satisfied, subject to an appeal to the Tribunal.
Effect of registration (para 6): there is an LLP by the name in the certificate; all the company's property, 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.
Where the 10 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | Section 56 and eligibility | 3 |
| 2 | Filing, registration and refusal | 4 |
| 3 | Effect of registration | 3 |
| Total | 10 |
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