Takeover over proprietory concern by Pvt Ltd Company
This query is : Resolved
21 July 2011
Hi,
Please give your comments and advice for the case given below.
A person started an agricultural business in his individual capacity. Some of his relatives and friends helped him with financial support. All these people together incorporated a company with its main object to carry on agricultural business. The proprietor mentioned above is a shareholder cum director in the company. The company want to take over the proprietor's business. They have two options.
1. To consider the expenses till date as pre-operating expenses (Around Rs. 10 Lakhs)of the company and to carry on the business as companies business.
2. To enter into an agreement with the proprietor who is also a shareholder-director in the company for takeover of the business with a consideration (share or cash)
Which option would be better?
When I went through the topic for conversion of proprietory concern to private limited company they specify that
a. the conversion should be mentioned in the main object clause of MOA of the company
b. The consideration should be in shares only
c. The proprietor cum shareholder should have 50 % share in the company and should be maintained for 5 years.
Is this correct and will the above mentioned takeover be considered as conversion?
Please give your comments and advice for the case given below.
A person started an agricultural business in his individual capacity. Some of his relatives and friends helped him with financial support. All these people together incorporated a company with its main object to carry on agricultural business. The proprietor mentioned above is a shareholder cum director in the company. The company want to take over the proprietor's business. They have two options.
1. To consider the expenses till date as pre-operating expenses (Around Rs. 10 Lakhs)of the company and to carry on the business as companies business.
2. To enter into an agreement with the proprietor who is also a shareholder-director in the company for takeover of the business with a consideration (share or cash)
Which option would be better?
When I went through the topic for conversion of proprietory concern to private limited company they specify that
a. the conversion should be mentioned in the main object clause of MOA of the company
b. The consideration should be in shares only
c. The proprietor cum shareholder should have 50 % share in the company and should be maintained for 5 years.
Is this correct and will the above mentioned takeover be considered as conversion?
21 July 2011
Yes this is correct. Why do you want to convert it into a private limited company. What will happen to the land. You will be covered by MAT under income tax.
Transfer of land to the company will invite for payment of stamp duty
Transfer of land to the company will invite for payment of stamp duty
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
- Two pancard
- Transfer of MF
- Relief Calculation u/s 89 of ITax 1961 in TableA Form10E
- Can we claim ITC in 28%
- Regarding E-invoice Generation
- Forgot to update debit note in gst
- Wrongly goods delivered to other state
- Loans and borrowing
- Conversion of Pvt Ltd Company to a LLP
- Foreign commission liable for rcm
- Spice form, ? mark comes in address
- E bike purchase can get input in GST
- Interest on borrowed capital rental income
- TDS APPLICABILITIY
- Issue with PTEC Registration – PAN Already Used
- Tds on GST in connection with sale to public company
- B2B Amendment
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- Regarding Advance Tax not claimed in the Return of Income for A.Y. 2025-26
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
