Conversion of company to LLP tax neutrality preserved when asset transfer meets continuity and shareholder-protection conditions. Transfers of assets or shares resulting from conversion of a private or unlisted public company into a limited liability partnership are governed by a new clause in section 47, subject to conditions: all assets and liabilities vest in the LLP; all shareholders become partners with proportionate capital contributions and profit shares; no consideration is paid to shareholders other than such contributions and profit shares; a prescribed aggregate profit sharing retention by original shareholders must be maintained for five years; distributions of accumulated profits to partners are restricted for three years; and eligibility is limited by the company's prior business receipts.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Conversion of company to LLP tax neutrality preserved when asset transfer meets continuity and shareholder-protection conditions.
Transfers of assets or shares resulting from conversion of a private or unlisted public company into a limited liability partnership are governed by a new clause in section 47, subject to conditions: all assets and liabilities vest in the LLP; all shareholders become partners with proportionate capital contributions and profit shares; no consideration is paid to shareholders other than such contributions and profit shares; a prescribed aggregate profit sharing retention by original shareholders must be maintained for five years; distributions of accumulated profits to partners are restricted for three years; and eligibility is limited by the company's prior business receipts.
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