Clause 18 - Amendment of section 47

Conversion exemption: company-to-LLP transfers of capital or intangible assets exempt from transfer treatment when statutory conditions are met.

Any transfer of a capital asset or intangible asset by a private company or unlisted public company pursuant to conversion into a limited liability partnership under the Limited Liability Partnership Act, 2008 shall not be regarded as a transfer for the purposes of section 45 if: all assets and liabilities vest in the LLP; all shareholders become partners with capital contribution and profit sharing ratios proportionate to their pre-conversion shareholding; no consideration is received other than capital contribution and share in profits; the shareholders' aggregate profit share in the LLP remains at least fifty per cent. during five years from conversion; the company's turnover in any of the three previous years does not exceed the statutory threshold; and no distribution from accumulated profits is made to partners for three years.