One listed company having two divisions. One division earning profits and other divison incurring losses. The loss making division involves shipping business and presently they opted tonnage tax shceme. The management decided that separate the loss making division as a other company.
Any transactions between these two division, accounted as inter unit balances. And apart from share capital and other reserves and surplus, every thing accounted separately. i.e they separate set of books.
My query is, how we segregate these two units as two different companies, especially in case of share holders fund and inter unit balances??
And what about tax implications if we make it two different companies??
CAclubindia
