LLPs Can Amalgamate With a Private Limited Company

Private companies incorporated under the Companies Act 1956 or Companies Act 2013 ("Act") and limited liability partnerships (LLPs) formed under the Limited Liability Partnership Act 2008 ("LLP Act") are two forms of corporate business vehicles for undertaking business in India.

There are some inherent differences in the manner in which these two corporate forms are to be set up and operated. One of the issues concerning private companies and LLPs which has recently been considered by the Chennai Bench of the National Company Law Tribunal ("NCLT") is the merger of LLPs with private companies. More details in this regard are set out below:

Facts:

M/s Real Image LLP and M/s Qube Cinema had filed a joint petition under §230 to §232 of the Act read with the Companies (Compromises, Arrangements and Amalgamations) Rules 2016 before the Chennai Bench of the NCLT for sanctioning a scheme of amalgamation wherein M/s Real Image LLP is proposed to be amalgamated and