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LLP Formation, Conversion , Changes
LLP Formation, Conversion , Changes
CS Makarand Lele
4 LLP Form No. For information regarding LLP Within 30 days from the date of
3 agreement incorporation
Non compete
Veto Power- the agreement may provide for veto power for one or more partners.
Can be useful if some partners intend to control decision making process. List of
items can be provided.
conversion and;
there is no transfer of any Asset or Liability after conversion.
No amount is paid, either directly or indirectly, to any partner out of the
accumulated profits of the company for a period of 3 years from the date of
conversion
Takeover of proprietary concern by LLP
After formation LLP can takeover any business by entering into an
agreement of takeover.
Object of the LLP as stated in the Agreement. If not covering the
proprietary business, the same needs to be amended by following the
process stated in the LLP Act.
It would attract stamp duty.
It would attract capital gain tax since it would be treated as transfer
under income tax act.
All licenses, permission to be changed to the name of LLP.
Effect of conversion
Alltangible , intangible assets , interests, rights, privileges, whole of
undertaking gets vested in LLP without further assurance, act or
deed.
Company shall be deemed to be dissolved & removed from records
against LLP.
Conviction ruling, order judgment may be enforced by or against LLP
Existing contracts, agreements, employment continues.
Notice of conversion in correspondence
LLP not later than 14 days after the date of registration of
Conversion of Private Company/firm to LLP, shall;
For a period of 12 months ensure that every official
correspondence bears:
A statement that it was a Private company/ Firm and
This provides a required exit opportunity to promoters from LLP set up.
Such default fee would be payable at the rate of Rs.100 per day after the expiry of the
date of filing upto a period of 300 days (section 69). This is to be paid at the time of filing
only with out any discretion.
The Judicial Magistrate of the first class or Metropolitan Magistrate shall have jurisdiction
to try offences under the LLP Act.
Penalties & Fines
It also provides for imprisonment penalty for following violations
• making by any person a false statement at the time of incorporation of LLP
• carrying on business of LLP with intent to defraud or for any fraudulent
purposes and
• making, knowingly, false statements or omitting any material fact, in any return,
documents etc. under the act.
• The offences which are punishable with fine only can be compounded by the
Central Government, by collecting a sum not exceeding the amount of maximum
fine prescribed for the offence.
Thank You
makarand.lele@mrmcs.com blogs.makarandlele.in
+91 98223 94381 www.mrmcs.com