TaxTMI 
TaxTMI 
Application of certain provisions of Companies Act, 1956 to Limited Liability Partnerships with modifications
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....rtnership, except where the contest otherwise requires, with the following modifications :- Modifications (i) (a) For the word "company" occurring in any of the aforesaid provisions of the Companies Act 1956, the words "limited liability partnership" shall be substituted; (b) for the word "articles" occurring in any of the aforesaid provisions of the Companies Act, 1956, the words "limited liability partnership agreement" shall be substituted; (c) for the word "director" occurring in any of the aforesaid provisions of the Companies Act 1956, the words "designated partners" shall be substituted; (d) for the word "promoter" or "member" or "contributory" occurring in any of the aforesaid provisions of the Companies Act 1956, the word "partner" shall be substituted; (e) for the word "Court" occurring in any of the aforesaid provisions of the Companies Act 1956 (except in sub-section (5A) of section 454, section 482 and section 483), the word "Tribunal" shall be substituted with the words "High Court" ; (f) for the words "this Act" occurring in any of the aforesaid provisions of the Companies Act, 1956, the word "Limited Liability Partnership Act" shall be substitut....
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....stitute the words "limited liability partnership". sub-section (3) Omit sub-section (3). 3. Section 445 (Copy of winding up order to be filed with Registrar) sub-section (1) Substitute sub-section (1) with the following :- "(1) On the making of a winding up order, it shall be the duty of the petitioner in the winding up proceedings and of the limited liability partnership to file with the Registrar a certified copy of the order, within fifteen days from the date of the making of the order. If default is made in complying with the foregoing provision, the petitioner, or as the case may require, the limited liability partnership, and the designated partners of the limited liability partnership shall be punishable with fine which may extend to one thousand rupees for each day during which the default continues." sub-section (1A) In sub-section (1A), for the words 'thirty days', substitute the words 'fifteen days'. sub-sections (2) and (3) In sub-sections (2) and (3), for the word "company" wherever it occurs, substitute the words "limited liability partnership". 4. Section 446 (Suits stayed on winding up order) sub-sections (1) to (3) In sub-sections (1....
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...., substitute the word "Tribunal"; and (ii) for the word "company", substitute the words "limited liability partnership". sub-section (2) In sub-section (2), for the word "company", substitute the words "limited liability partnership". 8. Section 453 (Receiver not to be appointed of assets with liquidator). In section 453, for the word "Court", substitute the word "Tribunal". 9. Section 454 (Statement of affairs to be made to Official Liquidator) sub-section (1) Substitute sub-section (1) with the following :- "(1) (i) Every limited liability partnership shall file with the .. 4 Tribunal a statement of its affairs in such form as may be prescribed alongwith the petition for winding up; (ii) where a limited liability partnership opposes a petition for its winding up, it shall file with the Tribunal a statement of its affairs in such form as may be prescribed within such time as may be specified by the Tribunal; (iii) where the Tribunal has made a winding up order or appointed the Liquidator as provisional liquidator, unless the Tribunal in its discretion otherwise orders, there shall be made out and submitted to the Liquidator a statement as to the affa....
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....quidator"; and (ii) for the word "Court", substitute the word "Tribunal". 11. Section 456 (Custody of company's property) sub-sections (1), (1A) and (2) In sub-sections (1), (IA) and (2),- (i) for the word "company", wherever it occurs, substitute the words "limited liability partnership"; and (ii) for the word "Court" occurring in sub-section (2), substitute the word "Tribunal". 12. Section 457 (Powers of liquidator) sub-sections (1) and (2) In sub-sections (1) and (2),- (i) for the word "Court", wherever it occurs, substitute the word "Tribunal"; (ii) for the words "company", wherever it occurs, substitute the words "limited liability partnership"; (iii) after clause (c) in sub-section (1), insert clause (ca), namely :- "(ca) to sell whole of the undertaking of the limited liability partnership as a going concern." (iv) For the word "contributory", wherever it occurs, substitute the word "partner"; and (v) for the word "company's seal", substitute the words "limited liability partnership's seal". 13. Section 458 (Discretion of liquidator) In section 458, for the word "Court", wherever it occurs, substitute the word "Tribunal". 14. Se....
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....th the liquidator." sub-sections (2) and (3) Omit sub-sections (2) and (3). 18. Section 465: (Constitution and proceedings of committee of inspection) sub-section (1) Substitute sub-section (1) with the following :- "(1) (i) A committee of inspection appointed in pursuance of section 464 shall consist of such number of members not exceeding twelve, as the Tribunal may order, being creditors and partners of the limited liability partnership or persons holding general or special powers of attorney from creditors or partners, in such proportions as may be agreed on by the meeting of creditors and partners or in case of difference of opinion between the meetings, as may be determined by the Tribunal. (ii) The procedure to be adopted by the committee shall be as may be prescribed. " sub-sections (2) to (5) Omit sub-sections (2) to (5). sub-section (7) In sub-section (7), for the word "contributories", substitute the word "partners". sub-section (8) In sub-section (8), - (i) for the word "contributories", wherever it occurs, substitute the word "partners"; and (ii) for the words "ordinary resolution", substitute the word "resolution". sub-section (9) In sub-sec....
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....section 476, for the word "Court", wherever it occurs, substitute the word "Tribunal". 25. Section 477 (Power to summon persons suspected of having property of company, etc.) sub-sections (1) to (8) In sub-sections (1) to (8),- (i) for the word "Court", wherever it occurs, substitute the word "Tribunal"; and 9 (ii) for the word "company", wherever it occurs, substitute the words "limited liability partnership". 26. Section 478 (Power to order public examination of promoters, directors etc.) sub-sections (1), (2), (4),(5), (7), (8) and (9) In sub-sections (1), (2), (4), (5), (7), (8) and (9),- (i) for the word "Court". wherever it occurs, substitute the word "Tribunal"; (ii) for the word "contributory", wherever it occurs, substitute the word "partner"; (iii) for the word "company", wherever it occurs, substitute the words "limited liability partnership"; and (iv) for the words "Official Liquidator", wherever they occur, substitute the word "liquidator". sub-section (3) Substitute sub-section (3) with the following :- "Any creditor or partner may also take part in the examination either personally or by any chartered accountants or company secre....
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....2) Omit sub-section (2). 32. Section 486 (Commencement of voluntary winding up) Apply without modification. 33. Section 487 (Effect of voluntary winding up on status of company) In section 487, (i) for the word "company", wherever it occurs, substitute the words "limited liability partnership"; and (ii) for the words "the corporate state and corporate powers of the company", substitute the words, "status of the limited liability partnership and its powers". 34. Section 488 (Declaration of solvency in case of proposal to wind-up voluntarily) sub-section (1) Substitute sub-section (1) with the following, :- "(1) Where it is proposed to wind up a limited liability partnership voluntarily, the majority of its designated partners (being not less than two) shall make a declaration in such form and manner and within such time as may be prescribed to the effect that the limited liability partnership has no debt or that it will be able to pay its debts in full within such period not .. 11 exceeding one year from the commencement of the winding up as may be specified in the declaration." sub-section (2) and (5) Omit sub-sections (2) and (5). sub-section (3) In ....
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....ited liability partnership who did not vote in favour of the resolution and expressed his dissent therefrom in writing addressed to the LLP Liquidator and left at the registered office of the limited liability partnership within seven days after the passing of the resolution, may require the LLP Liquidator to purchase his interest at a price to be determined by agreement or the registered valuer." sub-section (4) Substitute sub-section (4) with the following :- "(4) If the LLP Liquidator decides to purchase such partner's interest, the purchase money, raised by him in such manner as may be determined by a resolution passed by three-fourths of total number of partners, shall be paid before the limited liability partnership is dissolved." sub-sections (5) and (6) Omit sub-sections (5) and (6). 36. Section 497 (Final meeting and dissolution) sub-section (1) Substitute sub-section (1) with the following, namely :- "(1) As soon as the affairs of a limited liability partnership are fully wound up, the LLP Liquidator shall prepare final winding up accounts, explanations and a report on the conduct of affairs of the limited liability partnership during winding up in su....
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....Tribunal"; and (ii) omit the word "Official" occurring in clause (b). 39. Section 512 (Powers and duties of liquidator in voluntary winding up) sub-section (1) Substitute sub-section (1) with the following :- "(1) The LLP Liquidator may, with the sanction of a resolution by three- fourths of total number of partners of the limited liability partnership, and prior approval of the Tribunal in the case of a voluntary winding up,- (i) pay any class of creditors in full; (ii) make any compromise or arrangement with creditors or persons claiming to be creditors, or having or alleging them- selves to have any claim, present or future, certain or contin- gent, against the limited liability partnership, or whereby the limited liability partnership may be rendered liable; or (iii) compromise any money due from partners including outstanding, unrealized or unrecovered contribution, debt, and liability capable of resulting in a debt, and any claim, present or future, certain or contingent, ascertained or sounding only in damages, subsisting or alleged to subsist between the limited liability partnership and a partner or alleged partner or other debtor or person apprehending ....
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....mit sub-section (4). 42. Section 517 (Arrangement when binding on company and creditors.) sub-section (1) In sub-section (1),- (i) for the word "company", wherever it occurs, substitute the words "limited liability partnership"; and (ii) for the words "special resolution", substitute the words "resolution passed by three fourth of total number of partners". sub-section (2) In sub-section (2),- (i) for the word "contributory", substitute the word "partner"; and (ii) for the word "Court", wherever it occurs, substitute the word "Tribunal". 43. Section 518 (Power to apply to Court to have questions determined or powers exercised) sub-section (1) In sub-section (1),- (i) for the word "liquidator", substitute the words "LLP liquidator"; (ii) for the word "Court", wherever it occurs, substitute the word "Tribunal"; (iii) for the word "company", wherever it occurs, substitute the words "limited liability partnership"; (iv) for the word "contributory", substitute the word "partner"; and (v) for the words "the enforcing of calls", substitute the words "enforcing realization of outstanding contribution". sub-section (2) In sub-section (2),- (i ) for....
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....d "company", wherever it occurs, substitute the words "limited liability partnership"; and (ii) in sub-section (1), in clause (g), for the words and figures "section 235 or 237", substitute the word and figure "section 43". sub-section(9) Omit sub-section (9). 49. Section 531 (Fraudulent preference) sub-section (1) In sub-section (1). - (i) for the word "company", wherever it occurs, substitute the words "limited liability partnership"; and (ii) omit the proviso to this sub-section. sub-section (2) In sub-section (2), for the word "Court", substitute the word "Tribunal". 50. section 531A (Avoidance of voluntary transfer) In section 531A,- (i) for the word "company", wherever it occurs, substitute the words "limited liability partnership"; (ii) for the word "Court", substitute the word "Tribunal"; and (iii) for the word "liquidator", substitute the words "liquidator or LLP liquidator". 51. Section 532 (Transfers for benefit of all creditors to be void) In section 532, for the word "company", substitute the words "limited liability partnership". 52. Section 533 (Liabilities and rights of certain fraudulently preferred persons) sub-section....
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....tion 538 (Offences by officers of companies in liquidation) sub-section (1) In sub-section (1),- (i) for the word "company" wherever it occurs, substitute the words "limited liability partnership"; (ii) omit the words "or subject to supervision of"; (iii) for the word "Court", substitute the word "Tribunal"; and (iv) for the word "liquidator", substitute the words "liquidator or LLP liquidator". sub-section (3) In sub-section (3) .- (i) for the word "directors", substitute the words "designated partners"; and (ii) for the word "company", substitute the words "limited liability partnership". 58. Section 539 (Penalty for falsification of books) In section 539,- (i) for the word "company", wherever it occurs, substitute the words "limited liability partnership"; and (ii) for the word "contributory", substitute the word "partner". 59. Section 540 (Penalty for frauds by officers,-) In section 540,- (i) for the word "company", wherever it occurs, substitute the words "limited liability partnership"; and (ii) for the word "Court", substitute the word "Tribunal". 60. Section 541 (Liability where proper accounts not kept) sub-sections (1) a....
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....on of delinquent officers and members of the company) sub-section (1) In sub-section (1),- ... (v) for the words "liquidator or officer", wherever they occur, substitute the words, "Liquidator, LLP liquidator or officer"; and (vi) for the words "the Official Liquidator, or the liquidator", occurring in clause (b), substitute the words "the liquidator, or the LLP liquidator". 21 - (i) for the word "company" wherever it occurs, substitute the words "limited liability partnership"; (ii) for the word "Court", wherever it occurs, substitute the word "Tribunal"; and (iii) for the word "member", substitute the word "partner". sub-section(2) In sub-section (2),- (i) for the word "company", wherever it occurs, substitute the words "limited liability partnership"; (ii) for the word "member", substitute the word "partner"; and (iii) for the word "liquidator", wherever it occurs, substitute the words "LLP liquidator". sub-section(3) In sub-section(3),- (i) for the word "company", wherever it occurs, substitute the words "limited liability partnership"; and (ii) for the word "Court", wherever it occurs, substitute the word "Tribunal". sub-se....
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....In sub-section (2),- (i) for the word "Court", substitute the word "Tribunal"; and (ii) for the word "liquidator", substitute the words, "LLP liquidator". 23 sub-section (3) In sub-section (3),- (i) for the word "Court", substitute the word "Tribunal"; and (ii) for the word "contributory", substitute the word "partner". 66. Section 547 (Notification that a company is in liquidation) sub-section (1) In sub-section (1),- (i) for the word "company" wherever it occurs, substitute the words "limited liability partnership"; (ii) for the word "Court", substitute the word "Tribunal"; and (iii) for the word "liquidator", substitute the words, "liquidator on LLP liquidator". sub-section (2) In sub-section (2) .- (i) for the word "company" wherever it occurs, substitute the words "limited liability partnership"; and (ii) for the word "liquidator", substitute the words, "liquidator or LLP liquidator". 67. Section 548 (Books and papers of company to be evidence) In section 548,- (i) for the word "company" wherever it occurs, substitute the words "limited liability partnership"; (ii) for the word "contributories", substitute the word "partners";....
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....he Tribunal; and (b) in case of voluntary winding up, with the Registrar within such time as may be prescribed: 25 Provided that where the LLP liquidator or liquidator has not, during the period of account, received or paid any sum of money on account of the assets of the limited liability partnership, he shall file an affidavit of no receipt or payment for the period. (ii) The accounts shall be audited by a person qualified to act as auditor of the limited liability partnership and for the purpose of the audit, the LLP liquidator or liquidator shall furnish the auditor such information as the auditor may require: Provided that no such audit is required where the transaction during the period is for Rs.50, 000/- or less. (iii) Where the audit of the accounts is not required under this section, the statements of accounts shall contain a declaration by the LLP liquidator or liquidator that the books and accounts are properly maintained and funds have been utilized only for the purpose of winding up of the affairs of the limited liability partnership. Explanation ;- "Year" in relation to the statement means period from first day of April of the year to the 31....
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.... unless he explains the retention to the satisfaction of the Tribunal, he shall -- (a) pay interest on the amount so retained in excess, at the rate of twelve per cent per annum and also pay such penalty as may be determined by the Tribunal; (b) be liable to pay any expenses occasioned by reason of his default; and (c) also be liable to have all or such part of his remuneration, as the Tribunal may consider just, disallowed, or may also be removed from his office by the Tribunal.' 73. Section 554 (Liquidator not to pay moneys into private banking account) In section 554, for the words "Neither Official Liquidator nor any other liquidator of a company", substitute the words "Neither the liquidator nor LLP Liquidator of a limited liability partnership". 74. Section 555 (Unpaid dividends and undistributed assets to be paid into the Companies Liquidation Account) 27 sub-section (1) Substitute sub-section (1) with the following :- '(1) If the Liquidator or LLP Liquidator has in its hands or under his control any money representing - (a) any money representing dividend payable to any creditor or creditors, he shall transfer, within five days of such money being due....
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.... this section or under the provisions of any previous companies law); and (ii) omit clause (b). sub-section (8) In sub-section (8),- (i) for the words "Companies Liquidation Account", substitute the words "LLP Liquidation Account"; and (ii) for the words "fifteen years". substitute the words "seven years". sub-section (9) In sub-section (9),- (i) for the word "liquidator", substitute the words "LLP liquidator or liquidator"; (ii) for the words "Companies Liquidation Account", substitute the words "LLP Liquidation Account"; and (iii) for the word "Court", wherever it occurs, substitute the word "Tribunal". 75. Section 556 (Enforcement of duty of liquidator to make returns, etc) sub-section (1) In sub-section (1),- (i) for the word "company", substitute the words "limited liability partnership"; (ii) for the word "Court", wherever it occurs, substitute the word "Tribunal"; (iii) for the word "liquidator", wherever it occurs, substitute the words "liquidator or LLP liquidator"; and 29 (iv) for the word "contributory", substitute the word "partner". sub-section (2) and (3) In sub-section (2) and (3), for the word "liquidator", where....