Release formalities of employees in an acquisition

Hi,

 a Pvt Ltd compnay X is selling all assets and transfering employees to another pvt ltd company Y. Y is issuing offer letters to all the employees and also the managers and directors of X and paying a limpsum to X for the assets. 

 Questions -

1. Should X make all employees send a resignation letter to X?

2. How should X compose the releasing letters to its employees ? such as -

   a. As the asset purchase between X and Y is effective form Date, you will be relieved from duties of X from date. OR

   b. As per your resignation, you are being relieved. and No mention of the acquisition.

 

what is the best way to avoid complications in future.

 

FYI, X is paying gratuity to the eligible employees.

  

Replies (2)

It  will not  be  proper  to ask for resignation letters  of employees.  Company can issue letters to employees informing about the business transfer agreement and take their acknowledgement indicating their acceptance to the  same.  Thereafter transferee company  can issue letters of employment.

 

thank you so much sir.

One more question - is gratuity taxable if paid before retirement? We will pay gratuity to those employees who workd for 4 yrs 240 days. Should we deduct tax (TDS) of pay the full amount ?

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
08 October 2026
SALES TELECALLER

HIRE NOVA

Lucknow

Graduate (Any)

View Details
Company
13 October 2026
Accountant

Zerdi & Co. Chartered Accountants

Pune

B.Com

View Details
Company
10 October 2026
Accounts Associate Level 1

Abic and Mani Chartered Accountants

Kottayam

B.Com

View Details
Company
07 October 2026
Senior Account Manager

Amplio Invest

Mumbai

M.Com

View Details
Company
12 October 2026
Chartered Accountant - Internal Audit

HKC | Chartered Accountants & Business Advisors

Ludhiana

CA

View Details
Company
12 October 2026
Finance

I-Genext Consulting Private Limited

New Delhi

CA

View Details
Company
Featured 03 October 2026
Accountant

A P Lodha and Associates

Jalna

B.Com

View Details
Company
ARTICLESHIP 23 October 2026
CA Articleship / Article Assistant

M N Rao & Associates LLP

Vijayawada

CA Inter

View Details