Corporate Law
Rules and Procedures for Converting a General Partnership / Simple Limited Partnership into a Limited Liability Company
This summary outlines the concept of converting a company from a partnership form into a limited liability company, its legal nature, and the impact on partners’ obligations and third‑party safeguards under the Jordanian Companies Law. It also summarizes the principal procedural requirements imposed by the registrar to ensure financial verification and creditor notification.
Updated: 7 February 2023
Prepared and reviewed by: Ashraf Al-Khawaja
Concept and Legal Nature of Conversion
Conversion denotes a change in the company’s legal form to another statutorily permitted type while the company continues to exist, without liquidation. Doctrine splits between seeing conversion as extinction and re‑creation of the legal person and viewing it as continuity of the same legal person with a new form. Under Jordanian practice and the Companies Law, continuity is applied, meaning existing rights and obligations generally remain binding on the company after conversion.
Reasons for Conversion and Practical Effects
Drivers for conversion include partner death, internal disputes, changing economic conditions, and business expansion that call for a different corporate framework. Practically, converting to an LLC can limit partners’ future personal liability to their contributed shares, facilitate financing and governance, and preserve the economic entity by avoiding dissolution.
Third‑Party Safeguards and Key Supervisory Requirements
The law prescribes oversight measures to protect creditors and third parties: a written application to the registrar signed by the partners explaining the reasons and attaching audited financial statements for the preceding two years (or one year if applicable). The registrar may appoint a committee or experts to appraise assets and partners’ net rights, with fees borne by the company. The conversion request must be published in at least two daily newspapers within 15 days, and conversion cannot proceed without written consent from creditors holding more than two‑thirds of the company’s debt; statutory objections and appeals procedures also apply.
Partners’ Liability Before and After Conversion and Procedural Limits
Liabilities arising before conversion remain enforceable, and partners who were jointly liable under the prior form remain so for pre‑conversion obligations despite the change. Post‑conversion obligations are governed by the rules of the new form (for example, an LLC limits a partner’s liability to their share). Procedurally, companies must file the required documentation (general‑meeting resolution, paid capital statement, asset and debt estimates, payment receipts) and follow publication, registration, and statutory objection and appeal timelines.
Legal notice
Notice: This is general educational material based on a published source linked on the page. It does not substitute for checking the current statutory texts or subsequent amendments, nor does it constitute legal advice. Verify laws, official notices and case law, and consult a licensed lawyer before taking any action.
Sources and references
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