Dear Sir/ Madam,
I bought flat with reputed builder who is building township ( 3000+ active customers). Project is registered with MahaRera. I went in to agreement with builders. Builder as party which registered as LLP in agreement and loan is disbursed by SBI.
Later year after agreement, builder converted his company from LLP to private limited. Retained same name , directors and claims that they have shifted all assets and labilities from LLP to private limited. I can see status of LLP on MCA as " Converted to CMP and dissolved" .
I got demand letter of further payment from New private limited firm.
Query.
1) As LLP is dissolved and converted to Private limited, does this change has impact to agreement executed? ( change in party name)?
2) If yes, what is impact and consequences as customer? what needs to be done to update the change trails in to my agreement if its major issue
3) Incase of impact, due to large number of customer based its unfeasible for builder to execute supplementary agreement , also will cumbersome for customers to bring original copy from bank to execute supplementary agreement , in that case what legal remedy or option builder has to help customer to ensure title of individual flats remains clear.
4) How builder is coping this change with all this titles made with LLP and banks which are disbursing loans to customers
Note : Builder started updating MAHARERA records for other building but uploaded documents are still with old LLP name.
kindly guide.
Dear Mr Suyawanshi,
The answer to your queries are as follows:
1) As LLP is dissolved and converted to Private limited, does this change has impact to agreement executed? ( change in party name)?
Answer:- No, the conversion from LLP to Private Limited company will not impact the agreement entered by LLP. The liabilities of LLP are taken over by Private Limited Company therefore there no need to worry. You can say that the newly formed company has stepped into the shoes of LLP.
2) If yes, what is impact and consequences as customer? what needs to be done to update the change trails in to my agreement if its major issue.
Answer:- As a customer you don't need to do anything.
3) In case of impact, due to large number of customer based its unfeasible for builder to execute supplementary agreement , also will cumbersome for customers to bring original copy from bank to execute supplementary agreement , in that case what legal remedy or option builder has to help customer to ensure title of individual flats remains clear.
Answer:- There is no need for any supplementary agreement. The old agreements are as enforceable against the newly formed company as they were against erstwhile LLP.
4) How builder is coping this change with all this titles made with LLP and banks which are disbursing loans to customers
Answer:- This is very normal in business. People want to change the corporate form of the entity. But that will not effect anything as far as its obligations towards third parties are concerned. If you notice, the documents that you received in LLP's name, now it will in company's name. Earlier also the entity was a limited liability entity and now also it is a limited liability entity.
Regards
Shubham Bhardwaj (Advocate)
District & Session Court, Chandigarh
Punjab & Haryana High Court, at Chandigarh.
Disclaimer:- Opinion is only for guidance.
