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
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- ADVANCE PAYMENT OF ADVOCATE
- TDS Return Q1 FY 2026-27
- Eway bill generation from place other than registeted
- CREDIT NOTES WITHOUT GST
- DIN reactivation
- REGARDING ANNUAL RETURNS FILLINGS OF A COMPANY INCORPORATED ON 28.03.2025
- Condonation . E-Verification of last year return .
- UNWANTED CREDIT BALANCE OF GST AS PER BOOKS
- GST rate and HSN code for sale of racing horses
- Depreciation of fixed assets- coop housing society in mumbai
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
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
