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2021 (8) TMI 1135 - HC - Companies LawRequirement to deposit Stamp Duty and Registration Fee - conversion of the petitioner from ‘Partnership Firm’ to ‘Limited Liability Partnership’ - permission to reflect such change of name in the revenue record granted - HELD THAT:- In view of provisions of Section 58(4)(b) of the Limited Liability Partnership Act, consequent upon conversion of firm to limited liability partnership, there is automatic vesting/transfer of all assets of firm to the LLP - Sub-section (4) of Section 58 of LLP Act starts with non- obstante clause ‘notwithstanding anything contained in any other law for the time being in force’. Therefore, principles of statutory vesting of properties will apply to the instant case as well. Necessity of execution of an instrument upon conversion of a partnership firm to limited liability partnership - HELD THAT:- Section 3 of the Indian Stamp Act talks about the instruments, which are chargeable with duties.Once there is no instrument of transfer of assets of erstwhile partnership firm to LLP, then question of payment of stamp duty and registration charges on it does not arise. The registration fee is payable on an instrument compulsorily registerable under Section 17 of the Registration Act. Once there is no transfer of immovable property under an instrument, then the question of compulsory registration of that non-existent instrument and payment of stamp duty on it is not warranted. Neither the stamp duty nor the registration fee, therefore, is payable in such circumstances. Whether conversion of firm to LLP involves change in constitution? - HELD THAT:- Conversion of petitioner-firm to LLP is admittedly without any consideration. Neither any sale deed nor any conveyance deed has been executed. Transfer of assets of erstwhile partnership firm to LLP is by operation of law. Conversion to LLP is normally undertaken for restructuring exercises. One of the object of Limited Liability Partnership Act is to view it as an alternative corporate business vehicle providing the benefits of limited liability, while allowing its members the flexibility of organizing their internal structure as a partnership, based on a mutually arrived agreement. Petition allowed.
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