tag:blogger.com,1999:blog-3202774368551476669.post6426943670174111030..comments2023-09-15T16:21:31.980+05:30Comments on INDIAN CORPORATE LAW: Is the Doctrine of Ultra Vires Applicable to LLPs?Umakanth Varottilhttp://www.blogger.com/profile/12438677982004444359noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-3202774368551476669.post-64646556654103428222016-12-09T08:34:28.662+05:302016-12-09T08:34:28.662+05:30OFFHAND
The conclusion reads:
“In light of the abo...OFFHAND<br />The conclusion reads:<br />“In light of the above, we argue that the doctrine of ultra vires applies to the “business description/object clause” included in the LLP Agreement and hence,....” <br />On the first blush, in one’s independent perspective, a very crucial aspect of the law governing LLPs has been grossly over sighted. <br /><br />To briefly pinpoint: <br />Section 11 of the LLP Act provides, -<br />(1) (a) two or more persons associated FOR CARRYING ON A LAWFUL BUSINESS with a view to profit shall subscribe their names to an incorporation document; <br /> ......<br />(2) The incorporation document shall— <br /><br />(a) , (b), ... <br />(c) state the PROPOSED BUSINESS of the limited liability partnership;<br />(FONT supplied)<br />(d)..<br /><br />In one’s firm conviction, while on the aspect of ‘ultra vires’, the legal significance and intricate implications of the above highlighted terms, as briefly set out in a couple of published articles - <br />HERE <br />LIMITED LIABILITY PARTNERSHIP – A New Concept (2005) 128 Comp. Cas<br /><br />And HERE <br />CONCEPT OF LIMITED LIABILITY (2006) 65 SCL<br />PARTNERSHIP -A Study <br /><br />might to have to be necessarily made a conscious note of / kept in lazer sharp focus. More so, for arguing before, - so also for the purpose of forming a righteous opinion by, - court, in any given case in which the ground of ‘lawful business’ arises / comes to be raised, for due consideration.<br />vswaminoreply@blogger.comtag:blogger.com,1999:blog-3202774368551476669.post-85426922637263193442016-12-09T07:35:33.377+05:302016-12-09T07:35:33.377+05:30Though I have same view but logic used to arrive t...Though I have same view but logic used to arrive to the conclusion does not seems correct. <br />Section 366 and 377 of the Companies Act, 2016 have no connection and have very limited use of conversion of business organisations to company. <br /><br />This post correctly quoted Section 67(1) of the LLP Act which stipulates that the Central Government may, by notification in the Official Gazette, direct that “any of the provisions of the Companies Act, 1956 (1 of 1956) 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.” It seems there is no notification to the effect. <br /><br />However, LLP agreement like partnership agreement and memorandum (both are in reality agreements) usually limits its objects and area of operation of LLP. Anything done beyond the objects defined in such agreement is violation of and ultra vires to the contract among the parties to it.<br />Aishwarya Mohan Gahranahttp://aishmghrana.menoreply@blogger.com