General Circular No 09/2013, F.No.
1/10/2012-CL-V, dated 30.04.2013
To,
All Regional
Directors,
All Registrar of
Companies,
Conversion of a
Firm into a Limited Liability Partnership- Clarification
The Ministry has
been examining some of the issues raised by stakeholders with regard to
clarifications on the provisions of the Limited Liability Partnership (LLP)
Act, 2008 with regard to conversion of a partnership firm into LLP. The issues
relate to clarification with regard to
(i) Conversion of
multiple partnership firms (including audit firms) into a single LLP and
(ii) Manner in which
Appointee Company shall take note of the change in the status of auditor once
the relevant CA audit has got itself converted into a CA audit LLP as per the
relevant provisions of the LLP Act, 2008.
(2) The relevant issues have been examined
in the Ministry in consultation with the 'Expert Committee on LLP Issues' set
up in the Ministry and following clarifications are conveyed for the guidance
of concerned stakeholders:-
(i) The provisions
of Sections 55 and 58 of the LLP Act, 2008 read with Second Schedule thereto,
inter-alia, provide for requirements in respect of conversion of a single
partnership firm into a single LLP. The LLP Act, 2008 does not provide for Conversion
of Two or More Firms into a Single LLP.
(ii) The provisions
of Section 58(4) (b) of the LLP Act, 2008 provide that on conversion of a firm
into an LLP, as per the provisions of the said Act all property, assets,
interests, rights, privileges, liabilities, obligations relating to the firm
and the whole of the undertaking of the firm shall be transferred to and shall
vest in the LLP without further assurance, act or deed. Accordingly, if a CA
audit firm, being an auditor in a company under the Companies Act, 1956, gets
converted into an LLP after complying with the relevant provisions of the LLP
Act, 2008, then, such an LLP, in accordance with the provisions of section
58(4) (b) of the LLP Act, 2008 would be deemed to be the auditor of the said
company. Reference is also drawn to the notification number SO 1152(E)
dated 23rd May, 2011 and General Circular 30A dated 26th May,
2011 of the Ministry in this regard. The relevant Appointee Company may take
note of such change in status of the auditor through a resolution of the Board.
3. The concerned stakeholders, Registrar
of Companies, appointee companies should take note of the above clarifications
and comply accordingly.
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