'A' is a partnership firm consisting of 3 partners; 'B' is also a partnership firm consisting of 6 partners inclusive of the abovesaid 3 partners. Now, they decide to merge into a new private limited company. What are the modalities for the process without attracting Income-tax ( neither short term nor long term capital gains) and stamp duty on transfer?
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AMALGAMATION OF TWO FIRMS INTO A PRIVATE LIMITED COMPANY
Replies (2)
start the new pvt limited company and acquire the both companies by issue of shares in proportionate value to the partners.
Check section 47 of the Income tax Act which provides conditions to be satisfied for not regarding the conversion of firm to co as transfer.(transactions specified in sec 47 are not to liable to capital gains)
However stamp duty will required to be paid on transfer of property & on incorporation of co.
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