Updated: Thursday May 25, 2017/AlKhamis
Sha'ban 29, 1438/Bruhaspathivara
Jyaistha 04, 1939, at 05:47:31 AM
The Limited Liability Partnership Act, 2017
ACT No. XV OF 2017
An Act to make provisions for the incorporation,
regulation and winding up of limited liability partnerships as body corporate
and for matters connected;
WHEREAS it is expedient to make provisions for the
formation and regulation of limited liability partnerships and for matters
connected therewith or incidental thereto;
It is hereby enacted as follows:---
PART I
PRELIMINARY
1. Short title, extent and commencement.—(1) This
Act may be called the Limited Liability Partnership Act, 2017.
(2) It extends to the Whole of Pakistan.
(3) It shall come into force at once:---
Provided that different dates may be appointed for
different provisions of this Act and any reference in any such provision to the
commencement of this Act shall be construed as a reference to the coming into
force of that provision.
2. Definitions.—(1) In this Act, unless the
context otherwise requires,---
(a) ”address” in relation to a partner of a
limited liability partnership, means,---
(i) if an individual, his usual residential
address or service address provided by him; and
(ii) if a body corporate or company, the address
of its registered office;
(b) ”advocate” means an Advocate within the meaning
of the Legal Practitioners and Bar Councils Act, 1973 (XXXV of 1973);
(c) ”Appellate Bench” means Appellate Bench of
the Commission constituted under sub-section (2) of section 33 of the
Securities and Exchange Commission of Pakistan Act, 1997 (XLII of 1997);
(d) ”body corporate” includes,---
(i) limited liability partnership registered
under this Act;
(ii) limited liability partnership registered or
incorporated outside
(iii) company incorporated outside
(a) sole proprietorship;
(b) co-operative society registered under any law
relating to cooperative societies; and
(c) any other body corporate, not being a company
as defined in the Ordinance, which the Federal Government may, by notification
in the official Gazette, specify in this behalf;
(e) ”business” includes every trade, profession
and occupation;
(f) ”chartered accountant” means a chartered
accountant as defined in clause (b) of sub-section (1) of section 2 of the
Chartered Accountants Ordinance, 1961 (X of 1961) and who has obtained a
certificate of practice under sub-section (1) of section 6 thereto;
(g) ”Commission” means Securities and Exchange
Commission of Pakistan established under section 3 of the Securities and
Exchange Commission of Pakistan Act, 1997 (XLII of 1997);
(h) ”cost and management accountant” means a cost
and management accountant within the meaning Of the Cost and Management
Accountants Act, 1966 (XIV of 1966);
(i) ”Court” means the Company Bench of a High
Court as provided in section 7 and section 8 of the Ordinance;
(j) ”designated partner” means any partner
designated as such pursuant to section 10;
(k) ”financial year” means the period commencing
on the first day of July of any year and ending on the thirtieth day of June of
the succeeding year;
(l) ”firm” shall have the same meaning as
assigned to it under the Partnership Act, 1932 (IX of 1932);
(m) ”foreign limited liability partnership” means
a limited liability partnership that is formed, registered or incorporated
outside
(n) ”limited liability partnership means a
partnership registered under this Act;
(o) ”limited liability partnership agreement”
means any written agreement between partners of the limited liability
partnership which determines mutual rights and duties of the partners and their
rights and duties in relation to the limited liability partnership;
(p) ”officer” in relation to a limited liability
partnership, means,---
(i) any manager Of the limited liability
partnership;
(ii) a receiver and manager of any part of the
undertaking of the limited liability partnership appointed under a power
contained in any instrument; and
(iii) any liquidator of the limited liability
partnership appointed in a voluntary winding up;
(q) ”Ordinance” means the Companies Ordinance,
1984 (XLVII of 1984);
(r) ”partner”, in relation to a limited liability
partnership, means any person who has been admitted as a partner in the limited
liability partnership in accordance with the limited liability partnership
agreement;
(s) ”prescribed” means prescribed through
regulations made by the Commission for carrying out the purposes of this Act;
and
(t) ”Registrar” means a Registrar, an Additional,
a Joint, a Deputy or an Assistant Registrar, performing under this Act the duty
of registering limited liability partnership.
(2) The words and expressions used but not defined in
this Act shall have the same meaning as defined in the Securities and Exchange
Commission of Pakistan Act, 1997 (XLI1 of 1997).
PART II
NATURE OF LIMITED LIABILITY PARTNERSHIP
3. Separate legal personality.—(1) A limited liability
partnership shall be a body corporate by registration under this Act and shall
be a legal entity separate from its partners.
(2) A limited liability partnership shall have
perpetual succession.
Any change in the partners of a limited liability
partnership shall not affect the existence, rights or liabilities of the
Limited Liability Partnership.
(3) Any change in the partners of a limited liability
partnership shall not affect the existence, rights or liabilities of the
Limited Liability Partnership.
4. Capacity and execution of documents.—(1) A limited
liability partnership shall, by its name, be capable to,---
(a) sue and be sued;
(b) acquire, own, hold and develop or dispose of
property of every description, both movable and immovable;
(c) have a common seal; and
(d) do and suffer such other acts and things as
bodies corporate may lawfully do and suffer.
(2) An agreement in writing made before the
registration of a limited liability partnership, between the persons who
subscribe their names to the incorporation document, may impose obligations on
the limited liability partnership:
Provided that such agreement is ratified by all the
partners after the registration of the limited liability partnership:---
Provided further that prior to ratification by the
limited liability partnership, the person or persons who purported to act in
the name or on behalf of the limited liability partnership shall in the absence
of express agreement to the contrary be personally bound by the contract or
other transaction and entitled to the benefit thereof.
(3) Contracts on behalf of a limited liability
partnership shall be made in writing under common seal of the limited liability
partnership and any contract so made shall be effectual in law and shall bind
the limited liability partnership and its successors and all parties thereto.
(4) A document or proceeding requiring authentication
by a limited liability partnership may be signed by a designated partner of the
limited liability partnership.
(5) A limited liability partnership may by writing
under its common seal empower any person, either generally or in respect of any
specified matters, as its agent or attorney to execute deeds on its behalf and
a deed signed by such an agent .or attorney on behalf of the limited liability
partnership and under his seal or, subject to sub-sections (7) and (8), under
the appropriate official seal of the limited liability partnership shall bind
it and have the same effect as if it were under its common seal.
(6) The authority of any such agent or attorney
specified under sub-section (5) shall as between the limited liability
partnership and any person dealing with him continue during the period, if any,
mentioned in the instrument conferring the authority or if no period is therein
mentioned then until notice of the revocation or determination of his authority
has been given to the person dealing with him.
(7) The name of a limited liability partnership shall
appear in legible letters on,—
(a) its seal; and
(b) all business letters, statements of account,
invoices, official notices, publications, bills of exchange, promissory notes,
endorsements, cheques, orders, receipts and letters of credit of or purporting
to be issued or signed by or on behalf of the limited liability partnership.
(8) If an officer of a limited liability partnership
or any person on its behalf,—
(a) uses or authorizes the use of any seal
purporting to be a seal of the limited liability partnership whereon its name
does not so appear;
(b) issues or authorizes the issue of any
business letter, statement of accounts, invoice or official notice wherein its
name is not so mentioned; or
(c) signs, issues or authorizes to be signed or
issued on behalf of the limited liability partnership any bill of exchange,
promissory note, cheque or other negotiable instrument or any endorsement,
order, receipt or letter of 'credit wherein its name is not so mentioned he
shall be guilty of an offence punishable with a fine which may extend to five
hundred thousand rupees.
PART III
REGISTRATION
5. Incorporation document.—(1) For a limited liability
partnership to be registered,—
(a) two or more persons associated for carrying
on a lawful business with a view to profit shall have subscribed their names to
an incorporation document containing such particulars as provided in
sub-section (2);
(b) it shall have a registered office to which
all communications, notices and other documents may be addressed and served by
registered post or by courier, or by leaving it at its registered office
or by any other mode as may be prescribed by the Commission through
regulations:---
Provided that a limited liability partnership may
change the place of its registered office and where there is any change in the
registered office of the limited liability partnership, notice must be
delivered to the Registrar within fifteen days of such change in such a manner
as may be prescribed by the Commission through regulations and any such change
shall only take effect upon serving such notice;
(c) the incorporation document shall be ,filed in
such manner and with such fees, as may be prescribed by the Commission through
regulations; and
(d) there shall be filed a statement, in the form
prescribed by the -Commission through regulations, made by either an advocate
or a member of the Institute of Chartered Accountants or the Institute of Cost
and Management Accountants, who is engaged in formation of the limited
liability partnership or by anyone who has subscribed his name to the
incorporation document, that all the requirements of this Act and the rules and
regulations made there under have been complied with, in respect of
registration and matters precedent and incidental thereto.
(2) The incorporation document shall,---
(a) be in a form as may be prescribed by the
Commission through regulations;
(b) state the name of the limited liability
partnership;
(c) state general nature of its main business and
any other incidental or ancillary object thereto, which it proposes to carry on
as a limited liability partnership;
(d) state the province or the part of the
(e) state the name and residential address of
each of the persons who are to be partners of the limited liability partnership
on incorporation;
(f) either specify which of those persons are to
be designated partners or state that every person who from time to time is a
partner of the limited liability partnership is designated partner on
incorporation;
(g) state that the liability of its partners
shall be limited; and
(h) contain such other information concerning the
proposed limited liability partnership as may be prescribed by the Commission
through regulations.
(3) A person, who makes a statement or provides any
information under sub-section (1) and sub-section (2) which he,—
(a) knows to be false; or
(b) does not believe to be true, commits an
offence for which he shall be punishable with imprisonment for a term which may
extend to two years and with fine which may extend to one million rupees.
6. Provision related to name.—(1) Every limited
liability partnership shall have. the acronym “LLP” as the last letters of its
name.
(2) No limited liability partnership shall be
registered by aflame which, in opinion of the Registrar, is,---
(a) undesirable, inappropriate or deceptive or is
designed to exploit or offend religious susceptibilities of the people; and
(b) identical to that of any limited liability
partnership or body corporate or company or so nearly resembling that name as
to be calculated to deceive.
(3) Except with prior approval of the Commission in
writing, no limited liability partnership shall be registered by a name which
contains any words suggesting or calculated to suggest,---
(a) the patronage of any past or present
Pakistani or foreign had of State;
(b) any connection with the Federal Government or
a Provincial Government or any department or authority of any such Government;
(c) any connection with any corporation set up by
or under any Federal or Provincial law; or
(d) the patronage of, or any connection with, any
foreign government or any international organization.
(4) Whenever a question arises as to whether or not
the name of a limited liability partnership is in violation of the foregoing
provisions of this section, decision of the Commission thereon shall be final.
(4) Every limited liability partnership shall paint or
affix and keep painted or affixed, its name, in a conspicuous position, on outside
of every office or place in which its business is carried on in letters easily
legible and in English or Urdu characters, and also, if the registered office
is situated in a place beyond local limits of ordinary original civil
jurisdiction of a High Court, in the characters of one of the vernacular
languages used in that place.
(6) If a limited liability partnership does not paint
or affix and keep painted or affixed, its name in a manner directed by this
Act, it shall be liable to a fine which may extend to ten thousand rupees for
every day during which its name is not so kept painted or affixed and every
designated partner of the limited liability partnership who knowingly and
wilfully authorizes or permits the default shall be liable to the like penalty.
(7) Without prejudice to the generality of the
foregoing, the Commission may through regulations prescribe for provisions
relating to,---
(a) reservation of name of limited liability
partnership;
(b) rectification of name of limited liability
partnership;
(c) change of name of limited liability
partnership;
(d) publication of name and statement with
respect to limited liability; and
(e) fee to be prescribed for any ancillary
matter.
7. Registration of incorporation document.—(1) When
the requirements imposed by clauses (b) and (c) of sub-section (1) of section 5
have been complied with, the Registrar shall retain the incorporation document
and, unless the requirement imposed by clause (a) of that sub-section has not
been complied with, he shall,---
(a) register the incorporation document; and
(b) give a certificate that the limited
liability partnership is registered by the name specified in the
incorporation document.
(2) The Registrar may accept the statement delivered
under clause (d) of sub-section (1) of section 5 as sufficient evidence that
the requirement imposed by clause (a) of that sub-section has been complied
with.
(3) The certificate issued under clause (b) of
sub-section (1) shall be signed by the Registrar and authenticated by his
official seal.
(4) The certificate shall be conclusive evidence that
the limited liability partnership is registered by the name specified in the
incorporation document.
(5) Notwithstanding any provision of this Act or any
other law for the time being in force, the Registrar shall refuse to register
the incorporation document where he has reasons to believe that the proposed
business,---
(a) is undesirable or unlawful; or
(b) is deceptive; or
(c) would be contrary to the national security or
interest for the limited liability partnership to be registered.
PARTNERS, PARTNERSHIP AND THEIR RELATIONS
8. Partners.—(1) Any individual or body corporate or
company may become a partner in a limited liability partnership:
Provided that an individual shall not be capable of
becoming a partner of a limited liability partnership, if,---
(a) he has been found, to be of unsound mind by a
court of competent' jurisdiction and the finding is in force; or
(b) he is an undercharged insolvent; or
(c) he has applied to be adjudicated as an
insolvent and his application is pending.
(2) On the incorporation of a limited liability
partnership, the persons who subscribed their names to the incorporation
document shall be its partners and any other person may become a partner of the
limited liability partnership by and in accordance with the limited liability
partnership agreement.
9. Minimum number of partners.—(1) Every limited
liability partnership shall have at least two partners.
(2) If at any time the number of partners of a limited
liability partnership is reduced below two and the limited liability
partnership carries on business for more than six months or such other period
as may be prescribed while the number is so reduced, the person who is the only
partner of the limited liability partnership during the time that it so carries
on business after those six months or such other period as may be prescribed
and has the knowledge of the fact that it is carrying on business with him
alone, he shall be liable personally for the obligations of the limited
liability partnership incurred during that period.
(3) A person may cease to be a partner of a limited
liability partnership,---
(a) in the event of his death;
(b) in the event of dissolution of limited
liability partnership; and
(c) in accordance with an agreement with other
partners or, in the absence of agreement with the other partners as to
cessation of partnership, by giving reasonable notice to the other partners.
(4) Every partner of a limited liability partnership
is its agent subject to its agreement.
10. Designated partners.—(1) Every limited liability
partnership shall have at least one designated partner who,---
(a) is an individual; and
(b) a resident in
Provided that in case of a limited liability
partnership in which all the partners are bodies corporate, or in which one or
more partners are individuals and bodies corporate, at least two individuals
who are partners of such limited liability partnership or nominees of such
bodies corporate shall act as designated partners and one of the nominees or
partners, as the case may be, shall be a resident in Pakistan.
Explanation.—For the
purpose of this section, “resident in
(2) Subject to the provisions of sub-section (1), if
the incorporation document,---
(a) specifies who are to be designated partners
such persons shall be designated partners on incorporation; and
(b) states that each of the partners from time to
time of the limited liability partnership is to be a designated partner, every
such partner shall be a designated partner.
(3) Subject to the provisions of sub-section (1), any
partner may become a designated partner by and in accordance with an agreement
with the other partners and a partner may cease to be a designated partner in
accordance With an agreement with other partners.
(4) Subject to the provisions of this section, a
limited liability partnership shall appoint a designated partner within thirty
days of a vacancy arising for any reason:---
Provided that if no designated partner is appointed,
each partner shall be deemed to be a designated partner.
(5) An individual shall not become a designated
partner in a limited liability partnership unless he has given his prior
consent to act as such to the limited liability partnership in such form and
manner as may be prescribed by the Commission through regulations.
(6) Every limited liability partnership shall ensure
that the particulars of every individual who agrees to act as a designated
partner of the limited liability partnership and his consent to act as such are
within thirty days of the appointment of the designated partner” filed with the
Registrar in such form and manner as may be prescribed by the Commission
through regulations.
(7) An individual eligible to be designated partner
shall satisfy such conditions and requirements as may be prescribed by the
Commission through regulations.
(8) A person ceases to be a designated partner if he,
or the body corporate or company for which he is a nominee, ceases to be a
partner in the limited liability partnership.
(9) Unless expressly provided otherwise in this Act, a
designated partner shall be responsible for the doing of all acts, matters and
things as are required to bb done by the limited liability partnership in
respect to compliance of the provisions of this act including filing any
document, return, statement and the like report pursuant of the provisions of
this act and as may be specified in the limited liability partnership
agreement.
11. Joint liability. If the limited liability
partnership contravenes the provisions of sections 8,9 and 10, the limited
liability partnership and every designated partner commits an offence and shall
be punishable with fine which may extend to one million rupees.
12. Relationship of partners.—(1) Save as
otherwise provided by this Act, the mutual rights and duties of the partners of
a limited liability partnership, and the mutual rights and duties of a limited
liability partnership and its partners, shall be governed by the limited
liability partnership agreement between the partners.
(2) The limited liability partnership agreement and
any changes made therein shall be filed with the Registrar in the form and
manner, accompanied by such fee, as may be prescribed by the Commission through
regulations.
(3) An agreement in writing made before the
incorporation of a limited liability partnership between the persons who
subscribe their names to the incorporation document may impose obligations on
the limited liability partnership, provided such agreement is ratified by all
the partners after the incorporation of the limited liability partnership.
Explanation.—Any reference to a resolution of partners
for a particular matter is a reference to a resolution passed by all or such
number of partners as may be required by the limited liability partnership
agreement for that matter.
(4) In absence of agreement as to any matter, the
mutual rights and duties of the partners and the mutual rights and duties of
the limited liability partnership and the partners shall be determined by the
provisions relating to that matter as are set out in the First Schedule.
13. Cessation of partnership interest.—(1) A person
may cease to be a partner of a limited liability partnership in accordance with
an agreement with the other partners or, in absence of the agreement with the
other partners as to cessation of being a partner, by giving a notice of not
less than thirty days to the other partners of his intention to cease as
partner:---
Provided that a notice in writing to this effect shall
be delivered by the limited liability partnership to the Registrar.
(2) A person may also cease to be a partner of a
limited liability partnership by his death or by dissolution of the limited
liability partnership.
(3) Where a person has ceased to be a partner of a
limited liability partnership, hereinafter referred to as “former partner”, the
former partner is to be regarded (in relation to any person dealing with the
limited liability partnership) as still being a partner of the limited
liability partnership unless,—
(a) the person has notice that the former partner
has ceased to be a partner of the limited liability partnership; or
(b) notice, that the former partner has ceased to
be a partner of the limited liability partnership, has been delivered to the
Registrar.
(4) The cessation of a partner from the limited
liability partnership does not by itself discharge the partner from any obligation
to the limited liability partnership or to the other partners or to any other
person which he incurred while being a partner.
(5) Where a partner of a limited liability partnership
ceases to be a partner, unless otherwise provided in the limited liability
partnership agreement, the former partner or a person entitled to his share in
consequence of the death or insolvency of the former partner, shall be entitled
to receive from the limited liability partnership an amount,---
(a) equal to the capital contribution of the
former partner actually made to the limited liability partnership; and
(b) his right to share in the accumulated profits
of the limited liability partnership after the deduction of losses of the
limited liability partnership determined as at the date the former partner
ceased to be a partner.
(6) A former partner or a person entitled to his share
in consequence of death or insolvency of the former partner shall not have any
right to interfere in the management of the limited liability partnership.
(7) Any former partner or the former partner's
personal representative or liquidator who fails to comply with sub-section (6)
commits an offence:
14. Registration of changes in partners.—(1) A
limited liability partnership shall ensure that,---
(a) where a person becomes or ceases to be a
partner or designated, notice is filed with the Registrar within fifteen days
from the date he becomes or ceases to be a partner; and
(b) where there is any change in the name or
address of a partner, notice is filed with the Registrar within fifteen days of
such change in respect of designated partner:
Provided that where all the partners of a limited
liability partnership are, from time to time, designated partners notice under
clause (a) will not be required.
(2) A notice filed with the Registrar under
sub-section (1),---
(a) shall be in such form and accompanied by such
fee as may be prescribed by the Commission through regulations;
(b) shall be signed by the designated partner of
the limited liability partnership and authenticated in a manner as may be
prescribed by the Commission through regulations; and
(c) if it relates to admission of a partner,
shall contain a statement by the incoming partner that he consents to becoming
a partner, signed by him and authenticated in a manner as may be prescribed by
the Commission through regulations.
(3) If the limited liability partnership contravenes
the provisions of sub-section (1), the limited liability partnership and every
designated partner of the limited liability partnership shall be punishable
with fine which may extend to one million rupees.
(4) Any person who ceases to be a partner of a limited
liability partnership may himself file with the Registrar the notice referred
to in sub-section (2) if he has reasonable cause to believe that the limited
liability partnership may not file the notice with the Registrar and in case of
any such statement filed by a partner, the Registrar shall obtain a
confirmation to this effect from the limited liability partnership unless the
limited liability partnership has also filed such notice.
EXTENT OF LIABILITY
15. Extent of liability of limited liability
partnership.—(1) A limited liability partnership is not bound by anything done
by a partner in dealing with a person, if,---
(a) the partner in fact has no authority to act
for the limited liability partnership in doing a particular act; and
(b) the person knows that he has no authority or
does not know or believe him to be a partner of the limited liability
partnership.
(2) A limited liability partnership is liable if a
partner of the limited liability partnership is liable to any person as a
result of a wrongful act or omission on his part in the course of business of
the limited liability partnership or with its authority.
(3) An obligation of a limited liability partnership,
whether arising in Contract or otherwise, is solely obligation of the limited
liability partnership.
(4) The liabilities of a limited liability partnership
shall be met out of the property of the limited liability partnership.
16. Extent of liability of a partner.—(1) A partner is
not personally liable, directly or indirectly, for an obligation referred to in
sub-section (3) of section 15 solely by reason of being a partner of the
limited liability partnership.
(2) The provisions of sub-section (3) of section 15
and sub-section (l) of this section shall not affect the personal liability of
a partner for his own wrongful act or omission, but a partner shall not be
personally liable for the wrongful act or omission of any other partner of the
limited liability partnership.
17. Unlimited liability in case of fraud.—(1) In
the event of an act carried out by a limited liability partnership or any of
its partners with intent to defraud creditors of the limited liability
partnership or any other person or for any fraudulent purpose, the liability of
the limited liability partnership and partners who acted with intent to defraud
creditors or for any fraudulent purpose shall be unlimited for all or any of the
debts or other liabilities of the limited liability partnership:
Provided that in case any such act is carried out by a
partner, the limited liability partnership is liable to the same extent as the
partner unless it is established, by the limited liability partnership that
such act was without the knowledge or the authority of the limited
liability partnership.
(2) Where any business is carried on with such intent
or for such purpose as mentioned in sub-section (1), every person who was
knowingly a party to the * carrying on of the business in the manner aforesaid
shall be punishable with imprisonment for a term which may extend to two years
and with fine which may extend to two million rupees.
CONTRIBUTIONS
18. Form of contribution.—(1) The form and value
of contribution to the partnership of a partner, if any, will be decided
mutually by the partners and may consist of moneys, negotiable instruments,
properties including valuable rights, intangibles, knowledge and skills, etc.
which the partners deem to add value 16 partnership.
(2) The monetary value of contribution of partners
representing intangible properties including valuable rights, intangibles,
knowledge and skills etc. may be accounted for and disclosed in the accounts of
the limited liability partnership which can be valued reliably and can be
legally enforced, subject to the conditions as may be prescribed by the
Commission through regulations.
19. Liability for contribution.—(1) The
obligation of a partner to contribute money or other property or other benefit,
whether tangible or intangible, or to perform services for a limited liability
partnership shall be as per the limited liability partnership agreement.
(2) A creditor of a limited liability partnership,
which extends credit or otherwise acts in reliance on an obligation described
in that agreement, without notice of any compromise between partners, may
enforce the original obligation against such partner.
PART VII
FINANCIAL DISCLOSURES
20. Maintenance of books of accounts, other records
and audit, etc.—(1) The limited liability partnership shall maintain such
proper books of accounts as may be prescribed by the Commission through
regulations relating to its affairs for each year of its existence on accrual
basis and according to double entry system of accounting and shall maintain the
same at its registered office for such period as may be prescribed through such
regulations.
(2) Every limited liability partnership shall, within
a period of four months from the end of each financial year, prepare a
statement of accounts for the said financial year as at the last day of the
said financial year and the designated partners of the limited liability
partnership shall put their signature on such statement evidencing their
acceptance thereof.
(3) The Commission may, through notification in the
official Gazette, specify such class or classes of limited liability partnerships
who shall file the statement of accounts prepared pursuant to sub-section (2)
with the Registrar every year in such form and manner and accompanied by such
fee as may be prescribed by the Commission through regulations.
(4) The statement of accounts of limited liability
partnerships shall be audited in accordance with the regulations as may be
prescribed by the Commission:---
Provided that the Commission may, by notification,
exempt any class or classes of limited liability partnerships from the
requirements of this sub-section.
(5) A person shall not be qualified to be the auditor
of a limited liability partnership unless he is a chartered accountant.
(6) Any limited liability partnership which fails to
comply with the provisions of this section, unless otherwise provided, shall be
punishable with fine which may extend to two million rupees and the designated
partners of such limited liability partnership shall be punishable with fine
which may extend to one million rupees.
21. Inspection of documents kept by
Registrar. The incorporation document, names of partners and changes, if
any, made therein and any other documents filed by the limited liability
partnership from time to time, shall be available for inspection in office of
the Registrar by any person during business hours and in such manner and on
payment of such fees as may be prescribed by the Commission through regulations.
22. Penalty for false statement. If in any
return, statement or other document required by or for the purposes of any of
the provisions of this Act, any person makes a statement,---
(a) which is false in any material particular,
knowing it to be false; or
(b) which omits any material fact knowing it to
be material, he shall, save as otherwise expressly provided in this Act, be
punishable with imprisonment for a term which may extend to two years or with a
fine which may extend to two million rupees or with both.
23. Filing and registration of documents.—(1) Where in
opinion of the Registrar, any document required or authorized by or under this
Act to be filed or registered with the Registrar,---
(a) does not comply with the requirements of law,
or any regulations made by the Commission ;,or
(b) is not complete owing to any defect, error or
omission; or
(c) is insufficiently legible or is written upon
paper which is:not durable; or
(d) is not properly authenticated; or
(e) is not in the prescribed form, if any, the
Registrar may refuse to accept the document for filing or registration and
direct the limited liability partnership to file a revised document in the form
and within the period to be specified through order:---
Provided that the limited liability partnership may
appropriately amend or complete and resubmit the document again or submit a
fresh document in its place.
(2) If the document is filed or registered and its
contents are detected to be defective, false, forged or not capable of
rectification, the Registrar may, through order in writing, return or cancel
the registration of the document.
(3) If the Registrar returns or cancels the
registration of document under sub-section (2), the same shall not be deemed to
be delivered in accordance with the provisions of this Act.
(4) The registration or filing of document with the
Registrar does not affect or create a presumption as to the validity or
invalidity of the document or the correctness or otherwise of the information
contained in it.
PART VIII
ASSIGNMENT AND, TRANSFER OF PARTNERSHIP RIGHTS
24. Partner's transferable interest.—(1) The
rights of a partner to a share of the profits and losses of the limited
liability partnership and to receive distributions in accordance with the
limited liability partnership agreement are transferable either wholly or in
part and such change shall be communicated to the Registrar within seven days.
(2) The transfer of any right by any partner pursuant
to sub-section (1) does not by itself cause the disassociation of the partner
or a dissolution and winding up of the limited liability partnership.
(3) The transfer of right pursuant to this section
does not, by itself, entitle the transferee or assignee to participate in the
management or conduct of the activities of the limited liability partnership or
access information concerning the transactions of the limited liability
partnership.
PART IX
CONVERSION TO LIMITED LIABILITY PARTNERSHIP
25. Conversion from firm to limited liability
partnership.—The provisions of the Second Schedule shall apply to the
conversion from firm to a limited liability partnership.
26. Conversion from private limited company to limited
liability partnership.—The provisions of the Third Schedule shall apply to the
conversion from private limited company to a limited liability partnership.
PART X
FOREIGN LIMITED LIABILITY PARTNERSHIP
27. Foreign limited liability
partnership.—(1) Foreign limited liability partnership shall not carry on
business in
(2) The Federal Government shall make rules in
relation to establishment of place of business by foreign limited liability
partnership within Pakistan and carrying on their business or through
notification in the official Gazette direct that any provisions of the
Ordinance specified in such notification shall apply to any foreign limited
liability partnership, with such exception, modification and adaptation as may
be specified in the notification.
(3) In all other respects, the provisions of this Act
shall apply to a foreign limited liability partnership.
COMPROMISE, ARRANGEMENT OR RECONSTRUCTION OF LIMITED
LIABILITY PARTNERSHIPS
28. Compromise, arrangement or reconstruction of
limited liability partnerships.—(1) The Federal Government shall make rules in
relation to compromise, arrangement or reconstruction of limited liability
partnership or through notification in the official Gazette direct that any
provisions of the Ordinance specified in such notification shall apply to any
scheme of compromise, arrangement or reconstruction of limited liability
partnerships with such exception, modification and adaptation as may be
specified in the notification.
(2) In all other respects, the provisions of this Act
shall apply to compromise, arrangement or reconstruction under sub-section (1).
PART XII
WINDING UP AND DISSOLUTION
29. Winding up. The winding up of a limited
liability partnership may be either voluntary or by the Court.
30. Circumstances in which limited liability
partnership may be wound up by Court. A limited liability partnership may
be wound up by the Court,---
(a) if the limited liability partnership decides
that limited liability partnership be wound up by the Court;
(b) if the number of partners of the limited
liability partnership is reduced below two;
(c) if the limited liability partnership is
unable to pay its debts;
(d) if the limited liability partnership has
acted against the interests of the sovereignty, or integrity of
(e) if the limited liability partnership has made
a default in filing with the Registrar the statement of accounts for any five
consecutive financial years;
(f) if the limited liability partnership has been
conceived or brought forth or is or has been carrying on unlawful or fraudulent
activities; or
(g) if the Court is of the opinion that it is
just and equitable that the limited liability partnership be wound up.
31. Procedure for winding up.—(1) The Federal
Government shall make rules in relation to winding up and dissolution of
limited liability partnerships or through notification in the official Gazette
direct that any provisions of the Ordinance specified in such notification
shall apply to any winding up and dissolution proceedings of limited liability
partnerships with such exception, modification and adaptation as may be
specified in the notification.
(2) In all other respects, the provisions of this Act
shall apply to the procedure for winding up.
MISCELLANEOUS
32. Non-applicability of Act IX of
1932.—Save as otherwise provided by this Act, the provisions of the
Partnership Act, 1932 (IX of 1932) shall not apply to a limited liability
partnership.
33. Business transactions of partner with limited
liability partnership. A partner may lend money to and transact other
business with the limited liability partnership as may be prescribed and shall
have the same rights and obligations with respect to the loan or other
transactions as a person who is not a partner.
34. Application of company law.—The Federal
Government may, by notification in the official Gazette, direct that any of the
provisions of the Ordinance specified in the notification,---
(a) shall apply to any limited liability
partnership; or
(b) shall apply to any limited liability
partnership with such exception, modification and adaptation as may be
specified in the notification.
35. Electronic filing of documents.—(1) Any
document required to be filed or registered under this Act may be filed or registered
in such manner and subject to such conditions as may be prescribed by the
Commission through regulations.
(2) A copy of or an extract from any document
electronically filed with or submitted to the Registrar which is supplied or
issued by the Registrar and certified in such manner as may be prescribed by
the Commission through regulations to be a true copy of or extract from such
document shall, in any proceedings, be admissible in evidence as of equal
Validity with the original document.
(3) Any information supplied by the Registrar that is
certified by the Registrar in such manner as may be prescribed by the
Commission through regulations to be a true extract from any document filed or
filed with or submitted to the Registrar shall, in any proceedings, be
admissible in evidence and be presumed, unless evidence to the contrary is
adduced, to be a true extract from such document.
36. Payment of default fee. Subject to the
provisions of this Act, if any document or return required to be filed or registered
under this Act with the Registrar, is not filed or registered in time and is
allowed to be filed or registered after that time, then, without prejudice to
any other action or liability under this Act, such document or return may be
filed or registered with the Registrar on payment of a default fee of five
thousand rupees for every day of such delay in addition to any fee as is
payable for filing of such document or return, as the case may be.
37. Power of Registrar to strike defunct limited
liability partnership off register. Where the Registrar has reasonable
cause to believe that a limited liability partnership is not carrying on
business or its operation in accordance with the provisions of this Act, or has
failed to comply with any provision of this Act the name of the limited
liability partnership may be struck off the register of limited liability
partnerships in such manner and following such procedure as may be prescribed
by the Commission through regulations:---
Provided that the Commission through regulations May
provide for provisions related to voluntary strike off from the register and
dormant limited liability partnerships.
38. Penalty for improper use of word “limited
liability partnership” or “LLP”. If any person or persons carry on business
under' any new name or title of which the word “limited liability partnership”
or “LLP” or any contraction or imitation thereof is or are the last word or
words, that person or each of those persons shall, unless duly incorporated as
limited liability partnership be punishable with fine which may extend to two
million rupees.
39. General penalties. Any person guilty of
an offence under this Act for which no punishment is expressly provided shall
be liable to a fine which may extend to one million rupees and with a further
fine which may extend to ten thousand rupees for every day during which the
default continues, after the first day.
40. Offences by limited liability
partnerships. Where an offence under this Act committed by a limited liability
partnership is proved,---
(a) to have been committed with the consent or
connivance of a partner or partners or designated partner or designated
partners of the Limited Liability Partnership; or
(b) to be attributable to any neglect on the part
of the partner or partners or designated partner of that limited liability
partnership, the partner or partners or designated partner or designated
partners of the limited liability partnership, as the case may be, as well as
that limited liability partnership shall be guilty of the offence and shall be
liable to be proceeded against and punished accordingly.
41. Appeal to Appellate Bench. Any person
aggrieved by an order or decision of Registrar or any Commissioner or officer
of the Commission may prefer an appeal to the Appellate Bench and the
provisions of section 33 of the Securities and Exchange Commission of Pakistan
Act, 1997 (XLII of 1997), shall be applicable in respect of such appeal:---
Provided that such appeal shall be filed within sixty
days of the date of the decision and shall be accompanied by such fee as may be
notified by the Commission.
42. Appointment of Registrar of limited liability
partnerships, etc.—(1) The Commission may,---
(a) designate an officers of the Commission to be
the Registrar of limited liability partnerships; and
(b) from amongst the officers of the Commission,
appoint such number of Additional Registrars, Joint Registrars, Deputy
Registrars and Assistant Registrars of limited liability partnerships as the
Commission considers necessary, for the proper administration of this Act.
(2) The Registrar shall be responsible generally for
the carrying out of the provisions of this Act and for the collection of the
fees thereunder and shall pay all amounts so collected into the funds of the
Commission.
(3) The
Commission may give to the Registrar such directions as to the exercise of his
powers, functions or duties under this Act and the Registrar shall give effect
to such directions.
(4) The Commission may subject to such conditions or
restrictions as it deems fit, for the purposes of the administration of this
Act delegate to any person all or any of the powers, functions and duties
vested in the Registrar or may empower the Registrar to sub-delegate his powers
to that person except the power of delegation conferred by this sub-section.
43. Power of Registrar to obtain information.—(1) In
order to obtain such information as a Registrar may consider necessary for the
purposes of carrying out the provisions of this Act, the Registrar may require
any person including any present or former partner or designated partner or
employee of a limited liability partnership to answer any question or make any
declaration or supply any details or particulars in writing to him within a
reasonable period.
(2) In case any person referred to in sub-section (1)
does not answer such question or make such declaration or supply such details
or Particulars asked for by the Registrar within a reasonable time or time
given by the Registrar or when the Registrar is not satisfied with the reply or
declaration or details or particulars provided by such person, the Registrar
shall have power to summon that person to appear before him to answer such
question or make such declaration or supply such details as the case may be.
(3) Any person who fails to comply with any summons or
requisition of the Registrar under this section shall be punishable with a fine
which may extend to two million rupees.
44. Inspection of books of account by Registrar,
etc.—(1) The books of account and books and papers of every limited liability
partnership shall be open to inspection by the Registrar or by any officer
authorized by the Commission in this behalf if the Registrar or the Commission
considers it necessary so to do.
(2) It shall be the duty of every partner, officer or
other employee of the Limited liability partnership to produce to the person
making inspection under sub-section (I) all such books of account and books and
papers of the limited liability partnership in his custody or under his control,
and to furnish him with any such statement, information or explanation relating
to the affairs of the limited liability partnership, as the said person may
require of him within such time and at such place as he may specify.
(3) It shall also be the duty of every partner,
officer or other employee of the limited liability partnership to give to the
person making inspection under this section all assistance in connection with
the inspection which the limited liability partnership may be reasonably expected
to give.
(4) The person making the inspection under this
section may, during the course of inspection,---
(i) make or cause to be made copies of books of
account and other books and papers; or
(ii) place or cause to be placed by marks of
identification thereon in token of the inspection having been made.
(5) Where an inspection of the books of account and
books and papers of the limited liability partnership has been made under this
section by the Registrar or an officer authorized by the Commission, such
officer shall make a report to the Commission.
(6) Any officer authorized to make an inspection under
this section shall have all the powers that the Registrar have under this Act
in relation to the making of inquiries.
(7) A limited liability partnership or any person
commits an offence who,‑--
(a) fails to produce any book, minute book,
register or other document as required by the Registrar under this section; or
(b) obstructs, intimidates, distracts, harasses
or hinders the Registrar while exercising any of the powers under this section.
45. Punishment for default in compliance with
provisions of section 44. If default is made in complying with the
provisions of section 44, every person who is in default shall be punishable
with imprisonment for a term which may extend to one year and with fine which
shall not be less than one million rupees.
46. Investigation of affairs of limited liability
partnership.—(1) The Commission may appoint one or more competent persons as
investigators on receipt 6f a report under sub-section (5) of section 44, to
investigate the affairs of any limited liability partnership and to report
thereon in such manner as the Commission may direct.
(2) A person appointed as inspector under this
section, for the purposes of his investigation, have the same powers as are
vested in a court under the Code of Civil Procedure, 1908 (Act V of 1908),
while trying a suit, in respect of the following matters, namely:---
(a) enforcing the attendance of persons and
examine them on oath or affirmation;
(b) compelling the discovery and production of
books and papers and any material objects; and
(c) issuing commissions for the examination of
witnesses; and every proceeding before such person shall be deemed to be
judicial proceeding within the meaning of sections 193 and 228 of the Pakistan
Penal Code, 1860 (Act XLV of 1860).
(3) Any contravention of or non-compliance with any
orders, directions or requirement of the inspector exercising powers of a court
under sub-section (2) shall, in all respects, entail the same liabilities,
consequences and penalties as are provided for such contravention,
non-compliance or default under the Code of Civil Procedure, 1908 (Act V of
1908) and the.
47. Penalty to be imposed by the
Commission. Wherever a penalty is provided for any offence, contravention
of or default in complying with, any of the provisions of this Act, rules or
regulations made under this Act, such penalty shall be imposed by the
Commission after providing a reasonable opportunity of hearing to the party.
48. Appeal to the Court.—(1) Any person aggrieved by
the final decision of the Commission may, within sixty days of the decision
communicated to him, prefer an appeal to the Court.
(2) The Court may, on an appeal made to it under
sub-section (1), accept, set aside or vary the decision of the Commission or
make such other order as the interests of justice require.
Explanation.—For the purposes of sub-section (1),
“final decision of the Commission” means a decision of the Appellate Bench of
the Commission under section 33 of the Securities and Exchange Commission of
Pakistan Act, 1997 (XLII of 1997).
(3) The Court shall, at the stage of admission of the
appeal or at any time thereafter on the application of the aggrieved person and
after due notice to the Commission, decide by means of a reasoned order whether
the appeal is to be admitted in part or in whole depending on the facts and
circumstances of the case:---
Provided that the admission of the appeal shall
not per se operate as a stay and nor shall any stay be granted
therein unless the Commission has been given an opportunity of being heard.
(4) Notwithstanding anything contained in any other
law, the hearing of appeal shall continue day-to-day, unless sufficient cause
has been shown by the parties jointly or severally which is beyond the control
of the parties, the Court may adjourn the hearing for maximum of two dates and
such adjournment shall not be more than fifteen days at any one time or for more
than thirty days in all.
(5) Where on third hearing any party fails to appear
and address arguments before the Court the Court shall proceed and decide
appeal on merits and it shall be deemed that such party has relinquished its
rights to address arguments.
49. Recovery of penalties.(1)
Any penalty imposed by the Commission in exercise of its powers under this Act
or any rules or any regulations made under this Act, shall be payable to the
Commission and may be recovered by the Commission as a decree for the payment
of money. In case the person aggrieved by such order has,---
(a) preferred an appeal under section 48 and the
Court upheld the final order of the Commission and it will automatically be
converted into execution proceeding and no fresh notices need to be issued to
appellant; or
(b) not preferred an appeal to the Appellate
Bench of the Commission under section 33 of the Securities and Exchange
Commission of Pakistan Act, 1997 (Act XLII of 1997) and the Court on
application of the Commission has confirmed and allowed conversion or
initiation of execution proceedings after notices to the parties as deemed
appropriate by the Court.
(2) The Court shall exercise all the powers of
executing court as provided in the Code of Civil Procedure, 1908 (Act V of
1908), for the purposes of recovery of penalties:---
Provided that the Court may, for reasons to be
recorded, dispense with any procedure in the Code of Civil Procedure, 1908 (Act
V of 1908) and follow such procedure as it may deem fit in the circumstances of
the case for expeditious disposal.
(3) The executing Court may attach any immovable
property or sale of any movable property, including bank accounts, of the
person or company on whom a penalty has been imposed under this Act by the
Commission and any transaction or attempt to alienate, transfer, encumber or
mortgage such property shall be void, illegal and without any lawful authority.
(4) All Government departments, authorities, bodies,
private entities, housing societies or schemes, by whatever name called, banks
and any other concerned entity shall on the orders of the Court be bound to
assist the Commission in providing details of moveable or immovable property of
judgment debtor.
50. Cognizance of offences. Notwithstanding
anything contained in the Code of Criminal Procedure, 1898 (Act V of 1898), no
court shall take cognizance of any offence punishable with imprisonment or fine
or both, under this Act except on a complaint, in writing of the facts
constituting the offence, by an officer authorized in this behalf by the
Commission singed by a commissioner and no court inferior to that of court of
sessions shall try any such offence.
51. Power of the Federal Government to make
rules.—(1) In addition to the powers conferred by any other section, the
Federal Government may, by notification in the official Gazette, make rules,‑--
(a) for all or any of the matters which by this
Act are to be or may be made prescribed by the Federal Government;
(b) for establishment and regulating the
activities of any limited liability partnership or class of limited liability
partnerships; and
(c) generally for carrying out the purposes of
this Act.
(2) Before making any such rules under sub-section
(I), the draft thereof shall be published by the Federal Government in the
official Gazette for eliciting public opinion thereon within a period of not
less than fourteen days from the date of publication.
(3) Any rules made under sub-section (1) may provide
that a contravention thereof shall be punishable with a fine which may extend
to two million rupees and, where the contravention is a continuing one, with a
further fine which may extend to ten thousand rupees for every day after the
first during which such contravention continues.
52. Power to issue directives, circulars, guidelines,
etc.—(1) The Commission may issue such directives, prudential requirements,
codes, circulars, guidelines or notifications as may be necessary to carry out
the purposes of this Act and the rules and regulations made therein.
(2) Non-compliance or contravention of directives,
prudential requirements, codes, circulars, guidelines, notifications etc. shall
be punishable with a fine which may extend to two million rupees and where the
contravention is a continuing one, with a further fine which may extend to ten
thousand rupees for every day after the first during which such contravention
continues.
53. Power to make regulations.—(1) Subject to
sub-section (2), the Commission may make such regulations, which shall not be
inconsistent with the rules made under this Act and which, may be required to
carry out the purposes of this Act. Before making any regulations, the draft
thereof shall be published by the Commission in the official Gazette for
eliciting public opinion thereon within a period of not less than fourteen days
from the date of publication.
(2) Any regulation made under sub-section (1) may
provide that a contravention thereof shall be punishable with a fine which may
extend to two million rupees and, where the contravention is a continuing
one, with a further fine which may extend to ten thousand rupees for every day
after the first during which such contravention continues.
54. Power of the Commission to alter
Schedules. The Commission may by notification in the official Gazette,
alter or add any entry in the Schedules and such alterations or additions shall
have the effect as if enacted in this Act and shall come into force on the date
of the notification, unless the notification otherwise directs.
55. Power to remove difficulty. If any difficulty
arises in giving effect to the provisions of this Act, the Federal Government
may, by order published in the official Gazette, make such provisions, as may
appear to it to be necessary for removing the difficulty.
THE FIRST SCHEDULE
[See Section 12(4)]
DEFAULT PROVISIONS FOR LIMITED LIABILITY PARTNERSHIPS
1. The mutual rights and duties of the partners and
the mutual rights and duties of the Limited Liability Partnership and its
partners shall be determined, subject to the terms of any Limited Liability
Partnership Agreement or in the absence of any such agreement, by the
provisions in this Schedule.
2. All the partners of a Limited Liability Partnership
are entitled to share equally in the capital, profits and losses of the Limited
Liability Partnership.
3. The Limited Liability Partnership shall indemnify
each partner in respect of payments made and personal liabilities incurred by
him,---
(a) in the ordinary and proper conduct of the
business of the Limited Liability Partnership; or
(b) in or about anything necessarily done for the
preservation of the business or property of the Limited Liability Partnership.
4. Every partner may take part in the management of
the Limited Liability Partnership.
5. No partner shall be entitled to remuneration for
acting in the business or management of the Limited Liability Partnership.
6. No person may be introduced as a partner without
the consent of all the existing partners.
7. Any matter or issue relating to the Limited
Liability Partnership shall be decided by resolution passed by a majority in
number of the partners, and for this purpose, each partner shall have one vote.
However, no change may be made in the nature of business of the Limited
Liability Partnership without resolution passed by majority of less than
three-fourth.
8. Each partner shall render .true accounts and full
information of all things affecting the Limited Liability Partnership to any
partner or his authorized representatives.
9. If a partner, without the consent of the Limited
Liability Partnership, carries on any business of the same nature as and
competing with the Limited Liability Partnership, he must account for and pay
over to the Limited Liability Partnership all profits made by him in that
business.
10. Every partner shall account to the Limited
Liability Partnership for any benefit derived by him without the consent of the
Limited Liability Partnership from any transaction concerning the Limited
Liability Partnership, or from any use by him of the property, name or any
business connection of the Limited Liability Partnership.
11. No majority of the partners can expel any partner
unless a power to do so has been conferred by express agreement between the
partners.
THE SECOND SCHEDULE
[See section 25]
CONVERSION FROM FIRM TO LIMITED LIABILITY PARTNERSHIP
Conversion of firms to limited liability partnership
1. (1) A firm may convert to a Limited Liability
Partnership by complying with the requirements as to the conversion set out in
this Schedule.
(2) Upon such conversion, the partners of the firm
shall be bound by the provisions of this Schedule that are applicable to them.
Explanation.—In this paragraph, “convert”, in
relation to a firm converting to a Limited Liability Partnership, means a
transfer of the property, assets, interests, rights, privileges, liabilities,
obligations and the undertaking of the firm to the Limited Liability
Partnership in accordance with the provisions of this Schedule.
Eligibility for conversion
2. A firm may apply to convert to a Limited Liability
Partnership in accordance with this Schedule if and only if the partners of the
Limited Liability Partnership to which the firm is to be converted comprise all
the partners of the firm and no one else.
Statements to be filed
3. A firm may apply to convert to a Limited Liability
Partnership by filing with the Registrar,---
(a) a statement signed by all of its partners in
such medium and form and accompanied by such fees as the Commission may
prescribe, containing the following particulars, namely:---
(i) the name and registration number (if
applicable) of the firm;
(ii) the date on which the firm was registered
under the Partnership Act, 1932 (IX of 1932) or any written law (if
applicable);
(iii) as of the application date, the firm
appears to be able to pay its debt's as they become due in the normal course of
business; and
(iv) that all of its creditors have agreed with
the application to convert to a limited liability partnership; and
(b) incorporation document and statement referred
to in section 5.
Registration of Conversion
4. On receiving the documents referred to in paragraph
3, the Registrar shall subject to the provisions of this Act, register the documents
and issue a certificate of registration in such form as the Registrar may
determine stating that the Limited Liability Partnership is, on and from the
date specified in the certificate, registered under this Act.
Registrar may refuse to register
5. (1) Nothing In this Schedule shall be construed as
to require the Registrar to register any Limited Liability Partnership if he is
not satisfied with the particulars or other information furnished under the
provisions of this Act..
(2) The Registrar may, in any particular case, require
the documents referred to in paragraph 3 to be verified in such manner as he
considers fit.
Effect of registration
6. On and from the date of registration specified in
the certificate of registration issued under paragraph 4,---
(a) there shall be a Limited Liability
Partnership by the name specified in the certificate of registration registered
under this Act;
(b) all movable and immovable property vested in
the firm, all assets, interests, rights, privileges, liabilities, obligations
relating to the firm and the whole of the undertaking of the firm shall be
transferred to and shall vest in the Limited Liability Partnership without
further assurance, act or deed; and
(c) the firm shall be deemed to be dissolved and
if earlier registered under the Partnership Act, 1932 (IX of 1932) removed from
the records maintained under that Act.
Registration in relation to
property
7. If any property to which sub-paragraph (b) of
paragraph 6 applies is registered with any authority, the Limited Liability
Partnership shall, as soon as practicable after the date of registration, take
all necessary steps as required by .the relevant authority to notify the
authority of the conversion and of the particulars of the Limited Liability
Partnership in such medium and form as the authority may specify.
Pending proceedings
8. All proceedings by or against the firm which are
pending in any Court or before any authority on the date of registration may be
continued, completed and enforced by or against the Limited Liability
Partnership.
Continuance of conviction, ruling, order or judgment
9. Any conviction, ruling, order or judgment of any
court, Court or other authority in favour of or against the firm may be
enforced by or against the Limited Liability Partnership.
Existing agreements
10. Every agreement to which the firm was a party
immediately before the date of registration, whether or not of such nature that
the rights and liabilities there under could be assigned, shall have effect as
from that day as if,---
(a) the Limited Liability Partnership were a
party to such an agreement instead of the firm; and
(b) for any reference to the firm, there were
substituted in respect of anything to be done on or after the date of
registration a reference to the Limited Liability Partnership.
Existing contracts etc.
11. All deeds, contracts, schemes, bonds, agreements,
applications, instruments and arrangements subsisting immediately before the
date of registration relating to the firm or to which the firm is a party, shall
continue in force on and after that date as if they relate to the Limited
Liability Partnership and shall be enforceable by or against the Limited
Liability Partnership as if the Limited Liability Partnership were named
therein or were a party thereto instead of the firm.
Continuance of employment
12. Every contract of employment to which paragraphs
10 or 11 applies shall continue to be in force on or after the date of
registration as if the Limited Liability Partnership were the employer there
under instead of the firm.
Existing appointment, authority or power
13. (1) Every appointment of the firm in any role or
capacity which is in force immediately before the date of registration shall
take effect and operate from that date as if the Limited Liability Partnership
were appointed.
(2) Any authority or power conferred on the firm which
is in force immediately before the date of registration shall take effect and
operate from that . date as if it were conferred on the Limited Liability
Partnership.
Application of paragraphs 6 to 13
14. The provisions of paragraphs 6 to 13 (both
inclusive) shall not apply to any approval, permit or license issued under any
written law to the firm which is in force immediately before the date of
registration of the Limited Liability Partnership.
Partner liable for liabilities and obligations of firm
before conversion
15. (1) Notwithstanding anything in paragraphs 6 to 13
(both inclusive), every partner of a firm that has converted to a Limited
Liability Partnership shall continue to be personally liable (jointly and
severally with the Limited Liability Partnership) for the liabilities and
obligations of the firm which were incurred prior to the conversion or which
arose from any contract entered into prior to the conversion.
(2) If any such partner discharges any liability or
obligation referred to in sub-paragraph (1), he shall be entitled (subject to
any agreement with the Limited Liability Partnership to the contrary) to be
fully indemnified by the Limited Liability Partnership in respect of such
liability or obligation..
Notice of conversion in correspondence
16. (1) The Limited Liability Partnership shall ensure
that for a period of twelve months commencing not later than fourteen days
after the date Of registration, every official correspondence of the Limited
Liability Partnership bears the following:---
(a) statement that it was, as from the date of
registration, converted from a firm to a Limited Liability Partnership; and
(b) the name and registration number (if applicable)
of the firm from which it was converted.
(2) Any Limited Liability Partnership which
contravenes the provisions of sub-paragraph (I) shall be punishable with fine
which may extend to one million rupees and with a further fine which may extend
to ten thousand rupees for every day after the first day after which the
default continues.
[See section 26]
CONVERSION FROM PRIVATE COMPANY TO LIMITED
LIABILITY PARTNERSHIP
Interpretation
1. In this Schedule, unless the context otherwise requires,---
(a) ”company” means a private company as defined
in sub-section (7) of section 2 of the Companies Ordinance, 1984 (XLVI1 of
1984); and
(b) ”convert”, in relation to a private company
converting to a Limited Liability Partnership, means a transfer of the
property, assets, interests, rights, privileges, liabilities, obligations and
the undertaking of the private company to the Limited Liability Partnership in
accordance with this Schedule.
Eligibility for conversion of private companies to
Limited Liability Partnership
2. (1) A company may convert to a Limited Liability
Partnership by complying with the requirements as to the conversion set out in
this Schedule.
(2) A company may apply to convert to a Limited
Liability Partnership in accordance with this Schedule if and only if,---
(a) there is no security interest in its assets
subsisting or in force at the time of application; and
(b) the partners of the Limited Liability
Partnership to which it converts comprise all the shareholders of the company
and no one else.
(3) Upon such conversion, the company, its
shareholders, the Limited Liability Partnership to which the company has
converted and the partners of that Limited Liability Partnership shall be bound
by the provisions of this Schedule that are applicable to them.
Statement to be filed
3. A company may apply to convert to a Limited
Liability Partnership by filing with the Registrar,---
(a) a statement by all its shareholders in such
form and manner to be accompanied by such fees as the Commission may prescribe,
containing the following particulars, namely:‑--
(i) the name and registration number of the
company; and
(ii) the date on which the company was
incorporated under the Companies Ordinance, 1984 (XLVII of 1984); and
(b) incorporation document and statement referred
to in section 5.
Registration of conversion
4. On receiving the documents referred to in paragraph
3, the Registrar shall, subject to the provisions of this Act and the rules
made there under register the documents and issue a certificate of registration
in such form as the Commission may prescribe stating that the Limited Liability
Partnership is, on and from the date specified in the certificate, registered
under this Act.
Registrar may refuse to register
5. (1) Nothing in this Schedule shall be construed as
to require the Registrar to register any Limited Liability Partnership if he is
not satisfied with the particulars or other information furnished under the
provisions of this Act.
(2) The Registrar may, in any particular case, require
the documents referred to in paragraph 3 to be verified in such manner as he
considers fit.
Effect of registration
6. On and from the date of registration specified in
the notice of registration issued under paragraph 4,---
(a) there shall be a Limited Liability
Partnership by the name specified in the certificate of registration registered
under this Act;
(b) all movable and immovable property vested in
the company, all assets, interests, rights, privileges, liabilities,
obligations relating to the company and the whole of the undertaking of the
company shall be transferred to and shall vest in the Limited Liability
Partnership without further assurance, act or deed; and
(c) the company shall be deemed to be dissolved
and removed from the records of the Registrar of Companies.
Registration in relation to property
7. If any property to which clause (b) of paragraph 7
applies is registered
with any. authority, the Limited Liability Partnership shall as soon as
practicable after the date of registration, take all necessary steps as
required by the relevant authority to notify the authority of the conversion
and of the particulars of the Limited Liability Partnership in such medium and
form as the authority may determine.
Pending proceedings
8. All proceedings by or against the company which are
pending before any court, Court or other authority on the date of registration
may be continued, completed and enforced by or against the Limited Liability
Partnership.
Continuance of conviction,
ruling, order or judgement
9. Any conviction, ruling, order or judgment of any
court, Court or other authority in favour of or against the company may be
enforced by or against the Limited Liability Partnership.
Existing agreements
10. Every agreement to which the company was a party
immediately before the date of registration, whether or not of such nature that
the rights and liabilities there under could be assigned, shall have effect as
from that day as if,‑
(a) the Limited Liability Partnership were a
party to such an agreement iritead of the company; and
(b) for any reference to the company, there were
substituted in respect of anything to be done on or after the date of
registration a reference to the Limited Liability Partnership.
Existing contracts, etc.
11. All deeds, contracts, .schemes, bonds, agreements,
applications, instruments and arrangements subsisting immediately before the
date of registration relating to the company or to which the company is a party
shall continue in force on and after that date as if they relate to the Limited
Liability Partnership and shall be enforceable by or against the Limited
Liability Partnership as if the Limited Liability Partnership were named
therein or were a party thereto instead of the company.
12. Every contract of employment to which paragraph 11
or 12 applies shall continue in force on or after the date of registration as
if the Limited Liability Partnership were the employer there under instead of
the company.
Existing appointment, authority or power
13. (1) Every appointment of the company in any role
or capacity which is in force immediately before the date of registration shall
take effect and operate from that date as if the Limited Liability Partnership
were appointed.
(2) Any authority or power conferred on the company
which is in force immediately before the date of registration shall take effect
and operate from that date as if it were conferred on the Limited Liability
Partnership.
Application of paragraphs 7 to 14
14. The provisions of paragraphs 7 to 14 (both
inclusive) shall not apply to any approval, permit or license issued under any
written law to the company which is in force immediately before the date of
registration of the Limited Liability Partnership.
Notice of conversion in
correspondence
15. (1) The Limited Liability Partnership shall ensure
that for a period of twelve months commencing not later than fourteen days
after the date of registration, every official correspondence of the Limited
Liability Partnership bears the following, namely:—
(a) statement that it was, as from the date of
registration, converted from a company to a Limited Liability Partnership; and
(b) the name and registration number of the
company from which it was converted.
(2) Any Limited Liability Partnership which
contravenes the provisions of sub-paragraph (1) shall be punishable with fine
which may extend to one million rupees and with a further fine which may extend
to ten thousand rupees for every day after the first day after which the
default continues.
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