Provisions of introduction of fresh equity in private ltd
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
06 April 2015
Hi Team,
One of my clients is having paid up capital of INR 1 lakh and is having an investor to whom he is selling 12.5% stake at INR 30 Lacs. He is planning to bring entire money into company, rather than selling his own shares out of company.
Now I want to know how he can bring in 30 lacs in company with getting involved into capital gain issue.
He might not have desired net worth in current books.
Regards, Gaurav
One of my clients is having paid up capital of INR 1 lakh and is having an investor to whom he is selling 12.5% stake at INR 30 Lacs. He is planning to bring entire money into company, rather than selling his own shares out of company.
Now I want to know how he can bring in 30 lacs in company with getting involved into capital gain issue.
He might not have desired net worth in current books.
Regards, Gaurav
06 April 2015
Here, transfer of shares would be involved for sure. Hence, Capital Gains Tax would be applicable.
If you wanted to bring in money as share capital, sec 56 (2) (vii) c would be applicable.
I.e, if the shares are issued at a premium and if it is above the fair value of the shares, the difference between the fair value and issue price would become the income of the company as 'Income from other sources'.
If you wish to bring in the money as loan from diector, Companies Act is having many stringent provisions to curb those issues.
Best way is to allot him shares for the full value or else transfer those shares and pay capital gains tax. If that is the case, you can not bring in cash as 'Loan from Directors.' Cos Act is having many prohbitions regading this issue.
If you wanted to bring in money as share capital, sec 56 (2) (vii) c would be applicable.
I.e, if the shares are issued at a premium and if it is above the fair value of the shares, the difference between the fair value and issue price would become the income of the company as 'Income from other sources'.
If you wish to bring in the money as loan from diector, Companies Act is having many stringent provisions to curb those issues.
Best way is to allot him shares for the full value or else transfer those shares and pay capital gains tax. If that is the case, you can not bring in cash as 'Loan from Directors.' Cos Act is having many prohbitions regading this issue.
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
- ITR 2 Short Term gain & Long term gain
- Itr 1 processing
- Off Market debit and credit transaction
- Reporting Income under Section 44ADA
- INCOME TAX ON REDEVELOPEMENT OF FLAT
- ITR validation error - Balance sheet is not filled
- ITR returnFY25-26
- Share accounting-->fifo - capital gain - period as per fifo?
- Short Term Capital gain on shares bought and sold after 2018 onwards
- Form 10E u/s 89(1). Need clarification because experts opinions differ !!!!
- Building and other construction workers welfare cess act 1996
- Article ship defecit
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- Difference in tax comparison report
- Gst invoice numbering and delivery challan numbering
- Sales amount in Gstr1
- Tax liability on income of freelancer
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
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
