Pvt ltd co
This query is : Resolved
29 August 2011
can private limited company cash on bearer cheque on bank counter
29 August 2011
what is your query?
19 January 2017
Suppose I am director of Pvt Ltd co . My share capital is 100000 share @ 10/- . i sold my company share to another person or company 2000 share @ 10/- . MY query is when another person or company sold to share any body or not.
19 January 2017
I had purchase a Pvt Ltd company 200 share @ 10/-each . My query is i have sold these share to any other company or individual person.
10 August 2024
### **Cash Transactions with Private Limited Companies**
**1. Cash Transactions and Bearer Cheques**
**1.1. **Acceptance of Cash and Bearer Cheques**
- **Regulations on Cash Transactions:** As per the Income Tax Act, 1961, and other financial regulations in India, companies are generally restricted from dealing in large cash transactions. For example, the Companies Act, 2013, and various notifications under the Income Tax Act place restrictions on accepting cash payments over a certain limit.
- **Bearer Cheques:** Bearer cheques are usually not recommended for use because they can pose risks of misuse. Financial regulations and banking norms have increasingly restricted the use of bearer cheques due to the potential for money laundering and tax evasion.
**1.2. **Regulations for Private Limited Companies**
- **Cash Transactions Limit:** Companies are generally prohibited from accepting cash transactions exceeding ₹2 lakh as per Section 269ST of the Income Tax Act, 1961. This limit applies to payments for goods or services.
- **Bank Transactions:** When dealing with bearer cheques, it’s crucial to ensure that transactions are compliant with banking norms and anti-money laundering regulations.
### **2. Sale of Shares in a Private Limited Company**
**2.1. **Sale Process**
- **Transfer of Shares:** The process of transferring shares in a Private Limited Company involves several steps:
- **Share Transfer Deed:** You need to execute a Share Transfer Deed (Form SH-4) to transfer the shares. This document must be signed by both the transferor and transferee.
- **Board Approval:** The transfer of shares must be approved by the Board of Directors of the company. This approval is typically recorded in the minutes of the Board meeting.
- **Share Certificate:** Upon successful transfer, a new share certificate is issued to the transferee, and the old certificate is canceled.
**2.2. **Tax Implications and Compliance**
- **Capital Gains Tax:** When you sell the shares, you may be liable to pay capital gains tax based on the difference between the sale price and the purchase price. Ensure compliance with tax regulations related to capital gains.
- **Stamp Duty:** Share transfers may also require payment of stamp duty as per the applicable state laws. The Stamp Act prescribes the rate of duty on share transfer documents.
**2.3. **Reporting and Documentation**
- **Filing with Registrar:** After the share transfer, you must file the necessary forms with the Registrar of Companies (ROC) to update the register of members.
- **Record Keeping:** Maintain proper records of the share transfer, including the Share Transfer Deed, Board resolutions, and communication with the company’s share registry.
### **Summary**
- **Cash and Bearer Cheques:** A Private Limited Company should avoid accepting large cash transactions or bearer cheques due to regulatory restrictions. It is advisable to use bank transactions for clarity and compliance.
- **Sale of Shares:** When selling shares of a Private Limited Company, follow the legal process of transferring shares, obtain board approval, and ensure compliance with tax and stamp duty regulations. Document the transaction properly and update records with the Registrar of Companies.
For specific advice related to the sale of shares or handling cash transactions, consulting with a legal or financial expert is recommended.
**1. Cash Transactions and Bearer Cheques**
**1.1. **Acceptance of Cash and Bearer Cheques**
- **Regulations on Cash Transactions:** As per the Income Tax Act, 1961, and other financial regulations in India, companies are generally restricted from dealing in large cash transactions. For example, the Companies Act, 2013, and various notifications under the Income Tax Act place restrictions on accepting cash payments over a certain limit.
- **Bearer Cheques:** Bearer cheques are usually not recommended for use because they can pose risks of misuse. Financial regulations and banking norms have increasingly restricted the use of bearer cheques due to the potential for money laundering and tax evasion.
**1.2. **Regulations for Private Limited Companies**
- **Cash Transactions Limit:** Companies are generally prohibited from accepting cash transactions exceeding ₹2 lakh as per Section 269ST of the Income Tax Act, 1961. This limit applies to payments for goods or services.
- **Bank Transactions:** When dealing with bearer cheques, it’s crucial to ensure that transactions are compliant with banking norms and anti-money laundering regulations.
### **2. Sale of Shares in a Private Limited Company**
**2.1. **Sale Process**
- **Transfer of Shares:** The process of transferring shares in a Private Limited Company involves several steps:
- **Share Transfer Deed:** You need to execute a Share Transfer Deed (Form SH-4) to transfer the shares. This document must be signed by both the transferor and transferee.
- **Board Approval:** The transfer of shares must be approved by the Board of Directors of the company. This approval is typically recorded in the minutes of the Board meeting.
- **Share Certificate:** Upon successful transfer, a new share certificate is issued to the transferee, and the old certificate is canceled.
**2.2. **Tax Implications and Compliance**
- **Capital Gains Tax:** When you sell the shares, you may be liable to pay capital gains tax based on the difference between the sale price and the purchase price. Ensure compliance with tax regulations related to capital gains.
- **Stamp Duty:** Share transfers may also require payment of stamp duty as per the applicable state laws. The Stamp Act prescribes the rate of duty on share transfer documents.
**2.3. **Reporting and Documentation**
- **Filing with Registrar:** After the share transfer, you must file the necessary forms with the Registrar of Companies (ROC) to update the register of members.
- **Record Keeping:** Maintain proper records of the share transfer, including the Share Transfer Deed, Board resolutions, and communication with the company’s share registry.
### **Summary**
- **Cash and Bearer Cheques:** A Private Limited Company should avoid accepting large cash transactions or bearer cheques due to regulatory restrictions. It is advisable to use bank transactions for clarity and compliance.
- **Sale of Shares:** When selling shares of a Private Limited Company, follow the legal process of transferring shares, obtain board approval, and ensure compliance with tax and stamp duty regulations. Document the transaction properly and update records with the Registrar of Companies.
For specific advice related to the sale of shares or handling cash transactions, consulting with a legal or financial expert is recommended.
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