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Takeover of Proprietorship by existing private limited

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14 March 2017 want to know the procedure of takeover of proprietorship by existing private limited where proprietor is director of private limited. Proprietorship and private limited doing the same business. 1. Is the stamp duty mandatory? 2. How to save capital gain tax? 3. Type of agreement to be made?
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CA Shubhanshu Jain

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CA Shubhanshu Jain (Expert)
14 March 2017 Please ensure following to save capital gains :

- Private limited company will do same business as done by proprietorship.
- Proprietor should not get anything other than shares of private limited company.
- Proprietor should hold more than 50 % shares in company for atleast 3 years.
- all assets and liabilities related to business should be taken over by company.

If above conditions are satisfied then there will be no capital gains tax on conversion of proprietorship into private limited company.
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