Transfer of land & building
This query is : Resolved
jay.......
(Querist)
13 August 2008
A private ltd company which is registered in 1990 specializes in repairs /servicing &
manufacture of spares for turbines. One of the four promoters is the chairman of the company. The paid up capital of the company is Rs.2,05,000.
The free reserve in p/l A/c as on 31st march 2008 is Rs.24,00,000. The company does not have
any immovable fixed assets other than regular Plant & Machinery. The company is running its
business in a factory land & buiding on rent which is owned by the chairman of the company.
The estimated market value of this land & building is Rs.2,00,00,000. The current turnover
of the company is around Rs.1 Crore. The company has very good potential in improving its
turnover to Rs.10 to Rs.15 crores in the near future. The company is in need of funds for the
expansion. The company has only overdraft facility of Rs.75,00,000. There are investors &
other financial institutions to fund the growth but looking at the financials they shy away
indicating that the promoter's contribution is too low & the company does not have any
immovable properties
The chairman wants to transfer the land & building which is in her name to the company. How to effect the transfer. what is the accounting treatment.
manufacture of spares for turbines. One of the four promoters is the chairman of the company. The paid up capital of the company is Rs.2,05,000.
The free reserve in p/l A/c as on 31st march 2008 is Rs.24,00,000. The company does not have
any immovable fixed assets other than regular Plant & Machinery. The company is running its
business in a factory land & buiding on rent which is owned by the chairman of the company.
The estimated market value of this land & building is Rs.2,00,00,000. The current turnover
of the company is around Rs.1 Crore. The company has very good potential in improving its
turnover to Rs.10 to Rs.15 crores in the near future. The company is in need of funds for the
expansion. The company has only overdraft facility of Rs.75,00,000. There are investors &
other financial institutions to fund the growth but looking at the financials they shy away
indicating that the promoter's contribution is too low & the company does not have any
immovable properties
The chairman wants to transfer the land & building which is in her name to the company. How to effect the transfer. what is the accounting treatment.
S.Srinivasaraghavan
(Expert)
13 August 2008
The company will have to comply with Unlisted companies (Issue of Sweat Equity shares)Rules 2003.
CA Abhishek Tyagi
(Expert)
13 August 2008
Yes Srinicasaraghavan is right.
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