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

Rohan LLP and Sagar Pvt Ltd (a company) propose a scheme to amalgamate the two into one entity, relying on the LLP reconstruction and amalgamation provisions. What is the legal position?

The scheme is not permitted. The LLP Act expressly provides that a limited liability partnership shall not be amalgamated with a company, so neither Tribunal sanction nor a three-fourths majority can validate such an amalgamation under the reconstruction provisions.

  1. APermitted if the Tribunal sanctions it
  2. BPermitted if three-fourths in value of the partners agree
  3. CNot permitted, because an LLP shall not be amalgamated with a companyCorrect
  4. DPermitted only if the company is a private company

Explanation

The Explanation to Section 62 states that an LLP shall not be amalgamated with a company. Tribunal sanction or partner majority cannot override this bar, and the private status of the company is irrelevant.

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