STPI benefit u/s 10(a) -- Demerger

Hi,

We have an unlisted Ltd company with 100% share holding within the family.
We are registered under the STPI scheme.

We wish to move the business to a Partnership firm (all partners will be family members), cancel the STPI registration of the Ltd company & register the partnership firm with STPI.

Please advice what is the best way to move the business from the Ltd comany to the partnership firm retaining the income tax benefits u/s 10(a) in the partneship firm for the balance years of the STPI scheme tenure.

I thank you for your advice and suggestions.

Thx & regards,
Sanjay

Replies (2)

You may create a Partneship Firm, get it registered with desired partners & partnership deed. The new Firm so create may purchase all the shares of the said STPI Company, till the time the STPI exemption prevails. After that the STPI Registration may be surrendered & business may be directly taken over by the Partnership Firm.

Please note that, partnership deed should contain clause for operating as per STPI Regulations & should keep the export activity a fully exclusive activity than other intended activities.

The above may be subject to further apprehension of more experienced people.

 

Regards

Mohit

 

Thx for your suggestion!
Can the Partnership Firm buy the export business from the Ltd Co. at a consideration.

Then, the LTD Co can apply for unregistration from STPI and the partneship firm can register as a new Unit ?

Does section 10(a) / 10(b) Allow the benefits to be available to the successor or the new entity for the balanec number of years.

As I understand, Section 10(a) / 10(b) has an inportant role to play in this whole exercise.

Pls advice and if possible, pls include the relevant sections of the 10(a) / 10(b).

Thanks to all.

Best regards,
Sanjay

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