New equity investment treatment in company
This query is : Resolved
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11 March 2023
now a days everyone talks about sharktank
my query is related to this
suppose a person invested 1 crore for 1% equity in ABC pvt ltd.
the existing authorised capital of the company is Rs.10Lacs equally holded by A & B. i.e. 50000 shares of Rs.10 each by both of them.
1. what will be the treatment of that equity investment.
2. impact on authorised capital of the company.
3. what will be the capital structure of company.
my query is related to this
suppose a person invested 1 crore for 1% equity in ABC pvt ltd.
the existing authorised capital of the company is Rs.10Lacs equally holded by A & B. i.e. 50000 shares of Rs.10 each by both of them.
1. what will be the treatment of that equity investment.
2. impact on authorised capital of the company.
3. what will be the capital structure of company.
11 March 2023
1 Treat one lakh as capital and balance 99 lakhs as share premium.
2 Reduce share capital of existing share holders by one lakh.
3 As stated above.
2 Reduce share capital of existing share holders by one lakh.
3 As stated above.
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12 March 2023
Sir, is there any restriction or limit on share premium amount.
1% of existing share capital will be Rs.10000.00 in this case.
1% of existing share capital will be Rs.10000.00 in this case.
12 March 2023
Yes, Provisions of Section 56(2)(viib) says that when a private limited company issues share at a price which is more than its Face Value then consideration receives in excess of Fair Market Value (FMV) is taxable under the head “Income From Other Source”.
Agreed Rs 10000
Agreed Rs 10000
13 March 2023
amount received in excess of face value can be taxable under Section 56(2)(viib) in income tax act.
13 March 2023
No, amount received in excess of Fair Market Value (FMV) is taxable under the head “Income From Other Source”.
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