Can an Indian LLP merge with an Indian Company?

Can an Indian LLP merge with an Indian Company?

Varun Marwah

In a merger filing made before the Chennai bench of NCLT, with all other statutory filings and compliances in place, Judicial Member Sharief Tariq was tasked with just one question,

“…whether a Limited Liability Partnership (LLP) can be allowed to amalgamate with a private limited company under a scheme of amalgamation filed before the NCLT 

In answering the above question, the NCLT observed that the legislative intent behind enacting both the LLP Act, 2008 and the Companies Act, 2013  is to facilitate the ease of doing business and create a desirable business atmosphere for companies and LLPs.

The NCLT also took note of the following two arguments put forth before it:

1) That Companies Act, 1956 allowed the transferor to be a body corporate whether a company defined under the law or not;

2) That Companies Act, 2013 seemed to have omitted the above provision but allowed a free form of merger wherein a foreign body corporate could be merged into an Indian company or vice versa.

A ‘foreign body’ corporate could include a foreign LLP as well. The NCLT then noted,

If the intention of the 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, the NCLT observed, it appears that there is no express legal bar in allowing a  merger of Indian LLP with an Indian company.

(Read the order)

Bar and Bench - Indian Legal news