CAN A LLP MERGE WITH A COMPANY- YES SAYS NCLT ,CHENNAI BENCH

CAN A LLP MERGE WITH A COMPANY- YES SAYS NCLT ,CHENNAI BENCH

In M/s Real Image LLP, the transferor LLP proposed tbe amalgamated and vested with M/s Qube Cinema Technologies. Pvt Ltd

CAN A LLP BE AMALGMATED WITH A COMPANY?

Can an Indian Limited Liability Partnership (LLP) be allowed to amalgamate with an Indian private limited company under a scheme of amalgamation filed before the National Company Law Tribunal (NCLT)? The NCLT has answered the question in affirmative...

“For this purpose, both the Acts have provided provisions for merger or amalgamation of two or more LLPs and companies,” noted the NCLT bench of Ch Mohd Sharief Tariq.

PERMISSION FOR A FOREIGN LLP MERGE WITH AN 

INDIAN COMPANY

“If the intention of Parliament is to permit a foreign LLP to merge with an Indian company, then it would be wrong to presume that the Act prohibits a merger of an Indian LLP with an Indian company. “Thus, there does not appear any express legal bar to allow/ sanction merger of an Indian LLP with an Indian company,” said the tribunal.

It decided the question in a joint company petition moved by M/s Real Image LLP, the transferor LLP proposed tbe amalgamated and vested with M/s Qube Cinema Technologies Pvt Ltd.

Both the companies are engaged in business of establishing or acquiring audio and video laboratories for recording, re-recording, mixing, editing, computer graphics and special effects for film, television, video and radio productions etc.

PROVISION EXISTS BOTH UNDER COMPANIES ACT 2013 & LLP ACT FOR MERGER OR AMALGAMATION

The counsel for the petitioner companies submitted that sections 60 to 62 of the LLP Act and sections 230 to 234 of the Companies Act deal with mergers, amalgamations and arrangements and they empower NCLT to sanction a scheme proposed by a company.

SECTION 232 OF CA 2013 SILENT ON MERGER

It was, however, also submitted that as per Section 234 of the Companies Act, a foreign LLP and Indian company can merge with each other but such benefit has not been provided under Section 232 for permitting an Indian LLP to merge with an Indian company.

DECISION

While deciding the anomaly, the NCLT sanctioned the scheme proposed by the petitioner companies.