hiveoff of a company

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 December 2009 dear sir /madam,
we hv a company which wants to hive off (other co) a segment with incorporation of another company. the segment is having term loan/res & surplus, revenue, debtor/creditors and other items, i want to know the how the bs will be made for the hived off company and the parent co, suppose total fixed assets wdvalue is rs.50 cr and parent co will have equity capiatl 2cr share @ rs.50 each.
reg
ca pramod jain

Rasesh

Rasesh (Expert)
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30 December 2009 The division will be hived off with some assets and liabilities. The balance assets and liabilities remain with the parent compant. Further pursuant to the scheme by virtue of which the division is hived off and a new company is formed, shares will be issued to the existing shareholders of the parent company in a proportion to be determined by the Board and approved by the shareholders. In this way, new capital will be created in the hived off company. The parent company's capital will remain the same or may be reduced depending on the valuation of the balance company.