Dear All Experts,
A Pvt Ltd Company having Share
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Summary of Balance sheet as 31/03/2013
PAID UP CAPITAL |
10500000 |
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FREE RESERVES |
||
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SHARE PREMIUM |
6000000 |
|
|
ACCUMULATED PROFIT |
3600000 |
The Promoters of the company want to convert Pvt Ltd Comapy to Limited Liablity Partnership.
Capital gain issues on conversion of an existing company into an LLP:-
Finance Act, 2010 has provided that any transfer of capital assets, intangible assets by a private company or unlisted public company to LLP on its conversion into LLP would not be taxable on fulfilment of following conditions specified in Sec. 47(xiiia):-
Conversion is in accordance with provisions of Sec. 56/57 of LLP Act, 2008,
The total sale, turnover or gross receipts in business of the company does not exceeds Rs 60,00,000 in any of the three preceding previous years.
All the assets & liabilities are transferred to LLP,
All the shareholders of the company become partner of the LLP in same proportion as their shareholding in the company,
No consideration other than share in profit and capital contribution in the LLP arises to partners,
The erstwhile shareholders of the company continue to be entitled to receive at least 50 per cent of the profits of the LLP for a period of 5 years from the date of conversion,
No amount is paid, either directly or indirectly, to any partner out of the accumulated profits of the company for a period of 3 years from the date of conversion,
In case above stipulated conditions are not complied with, the benefit availed by the company shall deemed to be the profits and gains of the successor LLP chargeable to tax during the year in which requirements are not compiled. The amount of capital gain exemption given to the shareholders of the predecessor company will become income by way of capital gain of the shareholders of the predecessor company of the year in which non compliance takes place.
Querry is :
As per above balance sheet, whether above condition highlighted in Red Font only for Accumulated Profit ie. to the extent to Rs.36 Lac . If yes, then after conversion Promoters can withdraw Share Capial and Premium as withdrwal of capital or not ?
CAclubindia
