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CS Executive · Setting Up of Business, Industrial and Labour Laws · Limited Liability Partnership

Kaveri Textiles Ltd is an unlisted public company in Coimbatore and its shareholders wish to convert it into an LLP. Which statement is correct under the LLP Act, 2008?

An unlisted public company can convert into an LLP directly in accordance with the Fourth Schedule. Section 57 expressly permits this, so it need not first become a private company, and the Second Schedule applies only to partnership firms.

  1. AIt may convert in accordance with the Fourth ScheduleCorrect
  2. BIt may convert only after first becoming a private company
  3. CIt may convert only under the Second Schedule as a firm
  4. DIt cannot convert because only private companies are eligible

Explanation

Section 57 states that an unlisted public company may convert into an LLP in accordance with the Chapter and the Fourth Schedule. Limiting conversion to private companies (Section 56, Third Schedule) ignores Section 57.

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