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CSEET · Business Laws and Management · Elements of Law relating to Partnership and Limited Liability Partnership

Anand & Co., a partnership firm, was converted into Anand Associates LLP, and the Registrar issued a certificate of registration. Which statement about the effect of conversion on and from the date of registration is correct?

On conversion, all tangible and intangible property, assets, rights, liabilities and the whole undertaking of the firm vest in the LLP without further assurance, act or deed, and the firm is deemed dissolved and removed from the Registrar of Firms' records.

  1. AThe firm's property and liabilities remain with the old firm, which continues alongside the LLP
  2. BThe firm's property, assets, rights and liabilities transfer to and vest in the LLP without further assurance, act or deed, and the firm is deemed dissolved and removed from the Registrar of Firms' recordsCorrect
  3. COnly the tangible movable property vests in the LLP, and intangible property must be separately assigned
  4. DThe firm is dissolved only after the Registrar of Firms issues a separate order a year later

Explanation

Under section 58(4), on and from the registration date, all tangible and intangible property, assets, rights, liabilities and the whole undertaking vest in the LLP without further assurance, act or deed, and the firm is deemed dissolved and removed from the records. Option C is wrong because intangible property also vests.

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