I have 2 queries related to Sec 47 (xiv) of IT act,
1) Whether the sole proprietorship has to convert into new pvt ltd company or the business of proprietor can be succeeded by existing pvt ltd company,
2) If existing company can takeover the business of proprietor then in that case whether all the credentials of proprietor are also transferred to existing company i.e its past working experience, certificates from different dept., all registrations with different dept, etc
for taking the benefit of section 47(xiv), the conditions/provisions are as below
where a sole proprietary concern is succeeded by a company in the business carried on by it as a result of which the sole proprietary concern sells or otherwise transfers any capital asset or intangible asset to the company :
Provided that—
(a) all the assets and liabilities of the sole proprietary concern relating to the business immediately before the succession become the assets and liabilities of the company;
(b) the shareholding of the sole proprietor in the company is not less than fifty per cent of the total voting power in the company and his shareholding continues to remain as such for a period of five years from the date of the succession; and
(c) the sole proprietor does not receive any consideration or benefit, directly or indirectly, in any form or manner, other than by way of allotment of shares in the company;
But my question is whether a new company is incorporated in this process or an existing company can takeover under sec 47(xiv)
my question is whether a new company is incorporated in this process or an existing company can takeover under sec 47(xiv)
do Try to infer from the provision given above. do not seek ready made answer.
It will be beneficial for students.
Any way both the new and existing company can take over fulfilling conditions.
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