Conversion of proprietorship into the private limited
This query is : Resolved
16 January 2013
Dear Experts,
My Client is a Proprietorship firm since last 10 years but now they wants to float a Private Limited Company to continue their business.
The Firm has Net Assets of around Rs. 40 lacs which consist Building, Machines etc. My query is what is the best way to convert the assets and
Liabilities of the prop. Business into the Private Limited Company keeping in mind all the provisions of Income Tax Act and Company Law.
Please advice keeping in mind the latest change in the IT Act for issue of share at premium more the fair market value and the capital gain on the transfer
of the Assets and liabilities .
My Client is a Proprietorship firm since last 10 years but now they wants to float a Private Limited Company to continue their business.
The Firm has Net Assets of around Rs. 40 lacs which consist Building, Machines etc. My query is what is the best way to convert the assets and
Liabilities of the prop. Business into the Private Limited Company keeping in mind all the provisions of Income Tax Act and Company Law.
Please advice keeping in mind the latest change in the IT Act for issue of share at premium more the fair market value and the capital gain on the transfer
of the Assets and liabilities .
Guest
Guest
(Expert)
16 January 2013
In my opinion so far as Income Tax is involved the transfer of assets on conversion of proprietorship into a private limited company is excluded from the definition of transfer and as such capital gains will not be charged on the conversion. Refer to the conditions attached to the provision.
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
- About TDS & Income Tax
- Pass word to open justification report for Q1 for FY 2026-27
- Section 194JA & JB Income which ITR Form to use
- PPF interest-As Exempt Income disclosure
- Scrutiny and reopening of past returns
- Booth for sales promotion
- Type of Capital Gain
- F & O PROFIT REPORTING FOR AY 2026-27
- FEMA regulation Act. for inward remitance
- Grand in aid
- TDS on Rent received on redevelopment of building
- Tax on Deemed Capital Gain
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- Upload Level ValidationITR3Category of Defect B/D
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
- Interest credited in FY2025-2026 & TDS therein by EPFO does not reflect in AIS or Form 26AS
- 44ad eligble money lending interest
- Taxation in the hands of Landowner under JDA
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
