Ours is a 1.5 yr old Pvt Ltd company in ecommerce industry. We have an online store that has been doing good with consistent growth. Recently we have agreed upon having a new director on board who will invest 36 lakhs for 1/4th share in the company. His investment will be in the form of monthly payments of 1.5 Lakhs for 24 months.
Below are some details about our company.
Total sale Revenue generated : 1.2 cr
Company's Profit/Loss: - 4 Lakhs
Total paid up capital: 12 Lakhs
No. of current directors: 3 (each having 40k shares @ 10 rs / share)
Our online store has a very good brand value with a strong customer base.
We are not sure about how to issue shares to the new director. According to his investment, we need to issue him shares at a premium of Rs.90. Do we have to pay any tax if we issue shares at premium? If the tax people do not agree to our valuation of Rs.90/share then what happens?
How do we bring his investment into the company and offer him equal share ? Please guide us.
28 June 2014
If you issue shares at premium, premium will be taxable, in case the issue price : face value + premium (Rs. 100) is less than FMV of share. If FMV of share is above Rs. 10, first raise the price of share to correspond with FMV and not making the excess amount taxable.
Querist :
Anonymous
Querist :
Anonymous
(Querist)
28 June 2014
Thanks for your answer. Few more questions.
How do I know what is the FMV of our share? How to raise the price of share?
CAclubindia
