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Takeover of partnership firm by private limited (Accounts)

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This query is : Resolved



( Author )
04 February 2009

I would like to know the norms for take over of partnership firm by a private limited company.
Can a partnership firm be taken over before 31st march of a year and if it is possible then what are the accounting rules to be followed and things to be implemented in the books of accounts.
and what is the chargability in case of early take over on capital gains and how it is calculated.
And will the capital gain chrged of that year only or for oncoming years and what will be the mehtod of setting of such capital gains...
Thanks in advance


CA. B.SRINIVASULU

( Expert )
04 February 2009

The norm you have to check is the price fixed is reasonable or as per market driven conditions.

A firm can be taken over before 31st march.

Please merge the accounts of firm with the company. You can read accounting standard or merger and acquisitions and you can apply here then there will be clarity.

Goodwill also has to be calcuated and then you have to calculate capital gain of the firm.

Capital gain will be charged in the year of sale by partnership firm.


Jitender

( Expert )
04 February 2009

it can be taken over before 31st march . u need to prepare an agreement .
U need to follow conditions of sec 47 of income tax act so that capital gain tax will also be nil.


Jitender

( Expert )
04 February 2009

it can be taken over before 31st march . u need to prepare an agreement .
U need to follow conditions of sec 47 of income tax act so that capital gain tax will also be nil.


Kalyani

( Author )
04 February 2009

thank u so much


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