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CS Executive · Setting Up of Business, Industrial and Labour Laws · Conversion of Business Entities

Which one of the following statements about conversions is correct as per the Companies Act, 2013 and the LLP Act, 2008 text provided?

On conversion of a company into an LLP, the company is deemed dissolved and removed from the Registrar's records, and its assets, liabilities and undertaking vest in the LLP without further assurance, act or deed, as provided in Section 58(4) of the LLP Act, 2008.

  1. AUnder Section 18, a company that converts to another class must be wound up and its assets transferred to the new company by a deed of assignment
  2. BOn conversion of a company into an LLP, the company is deemed dissolved and its property vests in the LLP without further assurance, act or deedCorrect
  3. COn conversion of a company into an LLP, the LLP must inform the Registrar of Companies within fifteen days of the date of registration, and the company's property then vests in the LLP only after a separate deed
  4. DUnder Section 18, the Registrar issues the new certificate but the earlier debts of the company must be settled before the conversion takes effect

Explanation

Section 58(4) of the LLP Act provides that from the date of registration the firm or company is deemed dissolved and removed from the Registrar's records, and its property, liabilities and undertaking vest in the LLP without further assurance, act or deed. The option requiring a separate deed contradicts this. Section 18 requires no winding up and debts are not affected.

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