Amalgamation/merger of two partnership firms
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
15 September 2012
Can two partnership firms amalgamate and form a new partnership firm or can one partnership firm takeover the business of other partnership firm. Both the firms are Registered partnership firms with two common partners. One additional partner in one firm. What are the procedural matters? what are the tax implications?
15 September 2012
Tax Implications are:-
If you have a lot of immovable property then a slump sale may not be practicable because of the stamp duty exposure. Have you considered keeping the title to the properties in the old firm but giving a perpetual & irrevocable tenancy to the new firm? If the stamp duty law in your State is benign, then this may be workable.
What are the other assets in the business? If the other assets are nominal in value, then the department may argue that s. 50C should apply on the basis that the major value is taken up by the immovable property.
If 50C does not apply (on the basis that what is transferred is not "land or building") then one can fix the consideration at the net worth. There is no provision by which the consideration can be taken at the market value.
If you have a lot of immovable property then a slump sale may not be practicable because of the stamp duty exposure. Have you considered keeping the title to the properties in the old firm but giving a perpetual & irrevocable tenancy to the new firm? If the stamp duty law in your State is benign, then this may be workable.
What are the other assets in the business? If the other assets are nominal in value, then the department may argue that s. 50C should apply on the basis that the major value is taken up by the immovable property.
If 50C does not apply (on the basis that what is transferred is not "land or building") then one can fix the consideration at the net worth. There is no provision by which the consideration can be taken at the market value.
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- ADVANCE PAYMENT OF ADVOCATE
- Depreciation of fixed assets- coop housing society in mumbai
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- TDS on Consultancy- Non DTAA
- CREDIT NOTES WITHOUT GST
- Query – TDS on purchase of land from NRI under Income-tax Act, 2025
- TDS Return Q1 FY 2026-27
- Management System (IMS)
- Condonation . E-Verification of last year return .
- Eway bill generation from place other than registeted
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
