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Subject: Can a LLP go for Demeger to a Pvt Indian/Foreign company or another LLP
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Date: November 21, 2022
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Can a LLP go for Demeger to a Pvt Indian/Foreign company or another LLP

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The Limited Liability Partnership Act, 2008 does provide for merger or restructuring of two LLPs through the National Company Law Tribunal’s approval process.

However, the Income-tax Act, 1961 does not provide any specific exemption for demerger of LLPs as it does for demerger of companies. Then again, if the transaction is tax neutral, there would not be any requirement for a specific exemption.

It would be important to note that the Hon’ble NCLT Chennai Bench in the case of Real Image LLP with Qube Cinema Technologies Private Limited (CP/123/CAA/2018 dated June 11, 2018) had approved an amalgamation of an LLP and a private limited company. However, the Hon’ble NCLAT in the case of Regional Director & Anr v. Real Image LLP & Anr CAAT No. 352 of 2018 dated December 04, 2019 set aside the order of the NCLT holding that on reading of the provisions of Act 2013 as a whole in reference of conversion of Indian LLP into Indian company there is no ambiguity or absurdity or anomalous results which could not have been intended by the legislature.

Therefore, the LLP might have to register as a company and then demerge itself.

Disclaimer: This article is only for general information and is not intended to provide legal advice. Readers desiring legal advice should consult with an experienced professional to understand the current law and how it may apply to the facts of their case. Neither the author nor and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any inaccurate or incomplete information in this article nor for any actions taken in reliance thereon. No part of this document should be distributed or copied (except for personal, non-commercial use) without express written permission of

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