Section 18 - Amendment of section 47

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.