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CS Executive · Setting Up of Business, Industrial and Labour Laws · Selection of Business Organization

Rohan's unlisted private company wants to become an LLP. Under the Limited Liability Partnership Act, 2008, which statement about the effect of conversion on registration is correct?

On conversion, all tangible and intangible property, assets, rights, liabilities and the whole undertaking of the company vest in the LLP without further assurance, act or deed. The company is deemed dissolved and removed from the Registrar of Companies' records, as Section 58(4) provides.

  1. AThe company continues as a separate entity alongside the LLP
  2. BAssets and liabilities remain with the company and the LLP starts afresh
  3. COnly the tangible property of the company vests in the LLP
  4. DThe company's property, liabilities and undertaking vest in the LLP without further assurance, act or deed, and the company is deemed dissolvedCorrect

Explanation

Section 58(4) provides that from the registration date all tangible and intangible property, assets, rights, liabilities and the whole undertaking of the company vest in the LLP without further assurance, act or deed, and the company is deemed dissolved and removed from the Registrar's records. Option C is wrong as intangible property also vests.

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