Formalities for selling of proprietor business.

This query is : Resolved

CA Nayan Ratandhayara (Querist)
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28 September 2011
Can any one guide me on following issue :-

Mr. x wanted to buy the business of Proprietor firm of Mr.y. So what are the formalities under income tax and under service tax?

Please reply urgently.

U S Sharma

U S Sharma (Expert)
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28 September 2011 stamp duty is applicable on whole the consideration paid to the proprietor.

after the execution of sale deed, the new owner will get the following done in sequence.

change of ownership
1) trade licence
2) Bank accounts
3) Profession tax
4) any other registration where the PAN is not used

the old owner will cancel/ surrender all PAN based registrations, and at the same time the new owner will seek registration with new PAN number.
for statuary change the trade licence is needed to be changed at 1st stage and copies circulated to every respective department where the changed registration is applied, change in registration is sought.