I have an existing private limited company and an existing sole proprietor firm. Can I take over that sole proprietor firm in my Company? Would would be the process and would it attract income tax?
Thanks in advance.
Execute a Takeover agreement. The following to be complied,
1. Shareholding of proprietor to be atleast 50% for 5 years from acquisition.
2. No additional benefit to be received except for share consideration.
3. Alter MOA and add "To takeover M/s. _____ as a going concern...." in Main objects clause.
4. All assets and liabilities of the proprietor to be taken over except loans.
If you follow the above, Capital gains won't be attracted.
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