Question related to assest sale/purchase.
1. Company X in USA.
2. They have india subsidiary called X India Pvt. Ltd. Shares are held by X Corp, USA.
3. There is an Indian company Y Pvt Ltd.
Y Pvt Ltd has outsorcing contract with X corp, USA.
Mr. ABC is a non-exec director of X India Pvt. Ltd. He is also the 99% owner of Y pvt Ltd.
There is no direct relation between X India pvt ltd and Y Pvt Ltd.
Now, X India Pvt Ltd wants to purchase asset of Y - all assests and hire all employees. Y will survive, but will cease to do active business. Mr ABC will become an employee and on X India Pvt Ltd payroll, will also be a director (non-exec).
Question - is this affected by related party transaction ? what are the issues that we need to be aware of and dealing in leagal and tax friendly way ?
CAclubindia
