Case study on legality of purpose of forming Company
This query is : Resolved
27 December 2019
Ranjith is wealthy man enjoying large dividend and interest income. He has formed three private companies and agreed with each of them to hold block of investment as an agent for it. Income received was credited in the accounts of the company but the company handed back the amount to him as a pretended loan. this way, he divided his income in three parts in a bid to reduce his liability.
Wanted to know the facts, issues, relevant provisions, analysis and conclusion on the legality of the purpose for which the three companies were formed
Wanted to know the facts, issues, relevant provisions, analysis and conclusion on the legality of the purpose for which the three companies were formed
27 December 2019
In such a case deemed dividend provisions will be applicable on loan taken and tax liability will be more in this route.
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