Income Tax Act, 2025
Section 6: Ins. by Act 14 of 2010, s. 18 (w.e.f. 12011).
6. Ins. by Act 14 of 2010, s. 18 (w.e.f. 12011).
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Provided that—
(a) all the assets and liabilities of the company immediately before the conversion become the
assets and liabilities of the limited liability partnership;
(b) all the shareholders of the company immediately before the conversion become the
partners of the limited liability partnership and their capital contribution and profit sharing ratio
in the limited liability partnership are in the same proportion as their shareholding in the company
on the date of conversion;
(c) the shareholders of the company do not receive any consideration or benefit, directly or
indirectly, in any form or manner, other than by way of share in profit and capital contribution in
the limited liability partnership;
(d) the aggregate of the profit sharing ratio of the shareholders of the company in the limited
liability partnership shall not be less than fifty per cent at any time during the period of five years
from the date of conversion;
(e) the total sales, turnover or gross receipts in the business of the company in any of the
three previous years preceding the previous year in which the conversion takes place does not
exceed sixty lakh rupees; 1***
2[(ea) the total value of the assets as appearing in the books of account of the company in any
of the three previous years preceding the previous year in which the conversion takes place does
not exceed five crore rupees; and]
(f) no amount is paid, either directly or indirectly, to any partner out of balance of
accumulated profit standing in the accounts of the company on the date of conversion for a period
of three years from the date of conversion.
Explanation.—For the purposes of this clause, the expressions “private company” and “unlisted
public company” shall have the meanings respectively assigned to them in the Limited Liability
Partnership Act, 2008 (6 of 2009);]
(xiv) where a sole proprietary concern is succeeded by a company in the business carried on by it
as a result of which the sole proprietary concern sells or otherwise transfers any capital asset or
intangible asset to the company :
Provided that—
(a) all the assets and liabilities of the sole proprietary concern relating to the business
immediately before the succession become the assets and liabilities of the company;
(b) the shareholding of the sole proprietor in the company is not less than fifty per cent of the
total voting power in the company and his shareholding continues to remain as such for a period
of five years from the date of the succession; and
(c) the sole proprietor does not receive any consideration or benefit, directly or indirectly, in
any form or manner, other than by way of allotment of shares in the company;
all the assets and liabilities of the company immediately before the conversion become the
assets and liabilities of the limited liability partnership;
all the shareholders of the company immediately before the conversion become the
partners of the limited liability partnership and their capital contribution and profit sharing ratio
in the limited liability partnership are in the same proportion as their shareholding in the company
on the date of conversion;
the shareholders of the company do not receive any consideration or benefit, directly or
indirectly, in any form or manner, other than by way of share in profit and capital contribution in
the limited liability partnership;
the aggregate of the profit sharing ratio of the shareholders of the company in the limited
liability partnership shall not be less than fifty per cent at any time during the period of five years
from the date of conversion;
the total sales, turnover or gross receipts in the business of the company in any of the
three previous years preceding the previous year in which the conversion takes place does not
exceed sixty lakh rupees; 1***
2[
the total value of the assets as appearing in the books of account of the company in any
of the three previous years preceding the previous year in which the conversion takes place does
not exceed five crore rupees; and]
no amount is paid, either directly or indirectly, to any partner out of balance of
accumulated profit standing in the accounts of the company on the date of conversion for a period
of three years from the date of conversion.
Explanation.—For the purposes of this clause, the expressions “private company” and “unlisted
public company” shall have the meanings respectively assigned to them in the Limited Liability
Partnership Act, 2008 (6 of 2009);]
where a sole proprietary concern is succeeded by a company in the business carried on by it
as a result of which the sole proprietary concern sells or otherwise transfers any capital asset or
intangible asset to the company :
Provided that—
all the assets and liabilities of the sole proprietary concern relating to the business
immediately before the succession become the assets and liabilities of the company;
the shareholding of the sole proprietor in the company is not less than fifty per cent of the
total voting power in the company and his shareholding continues to remain as such for a period
of five years from the date of the succession; and
the sole proprietor does not receive any consideration or benefit, directly or indirectly, in
any form or manner, other than by way of allotment of shares in the company;