Getting acquired: Sell as individual or company?
This query is : Resolved
Akash Vora
(Querist)
14 February 2022
Hello,
I own 90% shares in a pvt ltd company, the other 10% is with my brother. We have just been made an acquisition offer. Now:
- Should we sell the company to the acquirer?
OR
- Should we just sell the intellectual property as individuals? This is possible as the IP is in our personal ownership, although we can change ownership to company if that is more beneficial from the tax point-of-view. It's a digital asset so changing the owner name is no big deal at all. Acquirer is interested in the digital asset only, so they are fine either way.
OR
- Should we sell our shares in the pvt ltd company to the acquirer? We have owned the 90% / 10% shares in this pvt ltd company since inception (10+ years). Would this come under long-term capital gains?
Thank you very very much
What will be the tax implications of each? Please provide percentages for each, and which will be best for us.
I own 90% shares in a pvt ltd company, the other 10% is with my brother. We have just been made an acquisition offer. Now:
- Should we sell the company to the acquirer?
OR
- Should we just sell the intellectual property as individuals? This is possible as the IP is in our personal ownership, although we can change ownership to company if that is more beneficial from the tax point-of-view. It's a digital asset so changing the owner name is no big deal at all. Acquirer is interested in the digital asset only, so they are fine either way.
OR
- Should we sell our shares in the pvt ltd company to the acquirer? We have owned the 90% / 10% shares in this pvt ltd company since inception (10+ years). Would this come under long-term capital gains?
Thank you very very much
What will be the tax implications of each? Please provide percentages for each, and which will be best for us.
CA R SEETHARAMAN
(Expert)
15 February 2022
Sell the intellectual property as individuals capital gains tax 20% payable.
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