CONVERSION OF LLP INTO COMPANY LIMITED BY SHARES.

www.carajput.com; LLP

www.carajput.com; LLP

LLP Act, 2008 does not cover the conversion of LLP into Company but in Companies Act, 2013 conversion of LLP into Company is covered in section 366.

Please note that recently MCA has notified Companies (Authorized to Register) Amendment Rules, 2018 which shall came into force on 16.02.2018 in which form URC–1 has been revised, which can be used for filling application by Company for registration under section 366.

COMPANIES CAPABLE OF BEING REGISTERED

The word “Company” for the purpose of this section shall include Partnership Firm (PF), Limited Liability Partnership (LLP), Co-operative Society but exclude Unlimited Company having more than and equals to 7 members, Company limited by shares, Company limited by guarantee.

According to Section 366 of Companies Act, 2013 read with rule 3 & 4 of the Companies (Authorized to Register) Rules, 2014:

SOME PRE-CONDITIONS FOR CONVERSION OF LLP INTO COMPANY LIMITED BY SHARES ARE AS FOLLOWS:.

  • Any Company registered under Indian Companies Act, 1882, Indian Companies Act, 1913 & Companies Act, 1956 shall not be allowed for taking registration under this Part.
  • The Company shall have at least 7 Members (i.e. a LLP shall consist of at least 7 partners at the time of conversion, if there are less than 7 then increase the number of partners first)
  • A Company having its liability limited by an act of Parliament shall not register as Unlimited Company or Company Limited by Guarantee under this part (i.e. a LLP can only convert into Company limited by shares).
  • Company shall before taking registration, take assent of all the members present & proxies (if allowed) in a general meeting summoned for this purpose.

PROCEDURE OF THE CONVERSION OF LLP INTO COMPANY LIMITED BY SHARES IS AS FOLLOWS:

Check whether number of members present is more than or equal to 7 or not (if not then increase the number of members first). Duly Conduct a meeting for this purpose and pass a resolution in this regard.

Obtain availability of name under section 4 of Companies Act, 2013 (record a ‘decision taken’ for this purpose).

Publish an advertisement in form URC-2 about such registration (seeking objections, if any within 21 days from publication), in English & Vernacular language newspaper circulating in the district in which LLP situate.

File form URC-1 and attach following documents in the form as per Rule 3 & 4:

  1. List showing names, address & occupation of all persons named as members with details of shares held, showing separately shares allotted for consideration in cash & for Consideration other than cash, also source of consideration. In case shares are numbered, each share by its number who on a day of seeking registration were partners in LLP.
  2. Affidavit from each proposed first directors that the proposed directors are not disqualified under section 164 to hold the position of the Director.
  3. List of names, address of partners of LLP.
  4. Copy of Limited Liability Partnership Deed (if revised then copy of past deed).
  5. Statement specifying Nominal share capital, No. of shares taken & amount paid, name of company with word limited/Pvt. Ltd.
  6. Consent/NOC from all secured creditors.
  7. Consent from majority of members whether present in person or in proxy (if allowed) in general meeting held for this purpose.
  8. Undertaking that proposed directors shall comply with requirements of Stamp Act.
  9. Statement of asset/liabilities certified by Chartered Accountant in Practice made for not earlier than 30 days from filling URC-1.
  10. Copy of latest Income Tax Return of LLP.
  11. Copy of notice published in Newspaper and proof of service to ROC.
  12. Declaration and statement of proceedings (if pending before any court/tribunal/ authority) shall be submitted with URC-1 that they have complied/filed all documents which are required to be filed under LLP Act & no any default persist till now.

Well enough! You have completed your part of duty now the part of duty of registrar begins……….Registrar shall within 30 days from filing the form, decide whether registration will be granted or not. If ROC satisfied with the documents presented then may issue Certificate of Incorporation (COI) in form INC-11.

With the issue of COI conversion is complete officially in all respect.

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

PROFESIONAL UPDATES JANUARY 19, 2016

PROFESIONAL UPDATES JANUARY 19, 2016

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STARTUP INDIA: Hon’ble PM Modi launches Startup India Program on Sat, 16 JAN 2016 to boost innovation based business with many incentives and ease of doing business.

  • Income Tax exemption for First 3 years.
  • Fund of ₹ 10,000 Crore (with ₹ 2,500 crore each year) to be invested in Startups in next 4 years and a Credit Guarantee Fund for ₹ 500 crore each year for next 5 years.
  • Capital Gain exemption if Startups invest capital by selling their personal assets.
  • 80% Rebate in registering Patent.
  • Easy Exits in 90 days.
  • Self-certification compliances.
  • No kind of Inspection for first 3 years.
  • Incubation program to be started in 5 Lac Schools and setting up of 35 new Incubation Centres.
  • No Govt. intervention in Startups.
  • A scheme for Women Entrepreneur to be announced soon.
  • A group of lawyers to be setup who will help resolving Patent related problems for free.
  • 7 New Research Parks to be started with a fund of ₹ 100 crore each.
  • Organizing Startup Fest all over India and abroad regularly.
  • Mobile App based registration for Startups from April 1, 2016.
  • Atal Innovation Mission (AIM) for encouraging Innovation among Startups.

The following are the Conditions for taking benefits of Startup Scheme:

1)It must be an entity registered/incorporated as

2) Five years must not had elapsed from the date of incorporation/registration.

3)  Annual turnover (as defined in the Companies Act, 2013) in any preceding financial year must not exceed Rs. 25 crores.

4)Startup must be working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.

5)The Startup must aim to develop and commercialise:

  •   A new product or service or process;
  • A significantly improved existing product or service or process,  that will create or add value for customers or workflow.

6)The Startup must not merely be engaged in:

  • Developing products or services or processes which do not have potential for commercialization; or
  • Undifferentiated products or services or processes; or
  • products or services or processes with no or limited incremental value for customers or workflow

7)The Startup must not be formed by splitting up, or reconstruction, of a business already in existence.

8) The Startup has obtained certification from the Inter-Ministerial Board, setup by DIPP to validate the innovative nature of the business and

  • Be supported by a recommendation (with regard to innovative nature of business), in a format specified by DIPP, from an Incubator established in a post-graduate college in India; or
  • Be supported by an incubator which is funded (in relation to the project) from GoI as part of any specified scheme to promote innovation; or
  • Be supported by a recommendation (with regard to innovative nature of business), in a format specified by DIPP, from an Incubator recognized by GoI; or
  • Be funded by an Incubation Fund/Angel Fund/ Private Equity Fund/ Accelerator/Angel Network duly registered with SEBI* that endorses innovative nature of the business; or
  • Be funded by GoI as part of any specified scheme to promote innovation; or
  • Have a patent granted by the Indian Patent and Trademark Office in areas affiliated with the nature of business being promoted.

* DIPP may publish a ‘negative’ list of funds which are not eligible for this initiative.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 9555555480

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

CORPORATE AND PROFESSIONAL UPDATE JANUARY 01, 2016

CORPORATE AND PROFESSIONAL UPDATE JANUARY 01, 2016 

31DIRECT TAXES

Additions merely on the basis of statement – It seems that addition has been made merely on the basis of statement/presumptive basis and no corroborative material has been brought on record. Presumption cannot take the shape of evidence however strong it may be – D.S. AGENCIES AND ASSOCIATES & USHA DISTRIBUTORS Versus ADDITIONAL COMMISSIONER OF INCOME-TAX – 2015 (12) TMI 1459 – ITAT MUMBAI

Addition u/s 69B – unexplained investment – reference to the DVO without rejecting the books of account is bad and therefore the valuation report submitted consequent thereto cannot be relied on for making an addition – ACIT, Central Circle I, Kanpur Versus Smt. Nirmal Arora – 2015 (12) TMI 1454 – ITAT LUCKNOW

IT: MAT – Book Profit u/s 115JB – AO has no power to re-compute book profit even if the Auditor gave qualified report under Companies Act – Sri Hariram Hotels (P) Ltd. Vs CIT-III & ITO, Ward-12 (2), Bangalore (2015 (12) TMI 1419 – Karnataka High Court)

FinMin issues report of committee on revitalizing public private partnership model of infrastructure

IT: Where Income Tax Officer deputed two Inspectors to make personal service of notice under section 148 upon assessee but assessee refused to receive said notice and, thereafter notice was affixed at main door of assessee’s clinic, there was valid service of notice under section 148 upon assessee[2015] 64 taxmann.com 276 (Allahabad) Dr. Sheo Murti Singh  v. Commissioner of Income-tax

CBDT specifies procedure for handling ‘Limited Scrutiny’ cases

CBDT: Interest on FDRs made in the name of Registrar General of the Court or the depositor of the fund on the directions of the Court will not be subject to TDS till the matter is decided by the Court – Circular No. 23/2015, 28 Dec 2015.

CBDT: AO to issue a notice U/s 142(1) with the questionnaire containing details of specific documents / information / evidences etc. along with initial notice issued u/s 143 (2) for selection of case for scrutiny –Instruction No.19/2015, dt. 29 DEC 2015.

Benefit of LPG subsidy will not be available if the consumer or his/her spouse had taxable income of more than Rs Ten lakh in previous financial year

Now AOs to issue scrutiny notice along with questionnaire to convey compliance requirement

CBDT has further clarified the procedure for handling ‘Limited Scrutiny’ cases – Instruction No.20/2015, dt.29 DEC 2015. : 

  • Reasons for ‘Limited Scrutiny’ shall be communicated to the assessee.
  • Questionnaire shall remain confined to only specific issues.
  • Cases should be completed expeditiously in limited number of hearings
  • If there is a reason to believe that there is escapement of income exceeding upto 10 Lac, the case may be shifted to Manual Scrutiny with prior approval of CIT / Pr. CIT.\

INDIRECT TAXES:

Denial of CENVAT Credit – whether the appellant who has procured ethyl alcohol from M/s Andhra Sugars on payment of duty of excise can be disallowed the credit of the said duty on the ground that the supplier of the inputs should not have paid the duty – Held No- Aurobindo Pharma Ltd, Aurobindo Pharma Limited (Unit-V) Versus Commissioner of Central Excise, Customs And Service Tax Hyderabad-I – 2015 (12) TMI 1399 – CESTAT BANGALORE

CBEC – hereby specifies the class of goods, namely crude , imported and stored in underground rock caverns, in respect of which no interest shall be charged under the said section 61 – vide Notification No. 147/2015 – Dated 23-12-2015.

ST: Arbitrary quantum while doing best judgement assessment – the order fatally suffers from lack of analysis/discussion regarding the contentions and arguments of the appellant and makes a mockery of the quasi-judicial process in-as-much-as it is not merely non-speaking but also absurd in parts – M/s. Carlsberg India Pvt. Ltd. Vs. C.S.T., Delhi (2015 (12) TMI 1403 – CESTAT New Delhi)

DVAT hereby clarifies that only the persons who are providing e-portals/websites to other dealers for passing on the orders from customers to the dealers /other vendors are required to enrol and file the returns in terms of Notification dated 26/06/15 referred above vide Circular no. 33 dated 29/12/2015.

DVAT: Department Trade & Taxes, Delhi has restricted unauthorized Entry in the Building with ban on carrying more than Rs.25,000/- CASH.

FAQ ON COMPANY LAW:

Query: Please tell us the form which is required to be filed for changing Registered office of LLP from one state to another.

Answer: You are required to file LLP Form 15 enclosing Consent letter of all DP’s, Consent letter of all Secured Creditors, Copy of Board Resolution, Copy of Advertisement & Proof of New Registered Office Address (If Rented then Rent Agreement, Utility Bill on the name of Owner & NOC) with the ROC.

MCA News:

Today is the last date for annual filing forms (AOC-4, AOC-4 XBRL, AOC-4 CFS & MGT-7) and it has been clarified by the MCA that no further extension would be accorded after this date. All stakeholders are requested to complete their filing accordingly.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 011-23343333

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)