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

Under Section 58 of the LLP Act, 2008, on conversion of a firm into an LLP, what is the position from the date specified in the certificate of registration?

On conversion, the firm's property, assets, rights, liabilities and obligations vest in the LLP without further assurance, act or deed, and the firm is deemed dissolved and removed from the Registrar's records. This follows from Section 58(4) of the LLP Act, 2008.

  1. AThe firm continues to exist alongside the LLP until its assets are sold
  2. BThe firm's property vests in the LLP without further assurance, act or deed, and the firm is deemed dissolvedCorrect
  3. CThe firm's liabilities remain with the old partners and do not pass to the LLP
  4. DThe firm continues in the Register of Firms for three years

Explanation

Section 58(4) provides that the firm's tangible and intangible property, assets, rights, liabilities and obligations transfer to and vest in the LLP without further assurance, act or deed. The firm is deemed dissolved and removed from the Registrar's records. The other options contradict this.

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