Sale of company formalities
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
08 October 2011
Hello.
Facts
Our client is interested in buying a particular building.
This building in question is owned by a company and not by an individual.
Instead of buying just the building our client wants to take over the entire company and all its assets and liabilities.
Questions
1. What would be the legal formalities and obligation be as far as Tax implication and other Statutory compliance is concerned for our client? Someone told me that a Due diligence report is necessary if this is to be done. Is it true? and if true is it only CA's who can do a DDR ?
2. is there no stamp duty required to be paid on land and buildings for such a sale?
3. Also just for my own knowledge would CG be attracted to the sellers? as it would seem like a Slump Sale?
Facts
Our client is interested in buying a particular building.
This building in question is owned by a company and not by an individual.
Instead of buying just the building our client wants to take over the entire company and all its assets and liabilities.
Questions
1. What would be the legal formalities and obligation be as far as Tax implication and other Statutory compliance is concerned for our client? Someone told me that a Due diligence report is necessary if this is to be done. Is it true? and if true is it only CA's who can do a DDR ?
2. is there no stamp duty required to be paid on land and buildings for such a sale?
3. Also just for my own knowledge would CG be attracted to the sellers? as it would seem like a Slump Sale?
08 October 2011
1. Due diligence can be done by a CA
2.Your client will purchase shares to take over the company.. Hence no stamp duty needs to be paid on land and building.
3.Under Slump Sale, an UNDERTAKING is transferred which can constitute a business on its own.. I suppose that the company which your client proposes to take over does not constitute an UNDERTAKING. Hence it is not a case of Slump sale
2.Your client will purchase shares to take over the company.. Hence no stamp duty needs to be paid on land and building.
3.Under Slump Sale, an UNDERTAKING is transferred which can constitute a business on its own.. I suppose that the company which your client proposes to take over does not constitute an UNDERTAKING. Hence it is not a case of Slump sale
Querist : Anonymous
Querist :
Anonymous
(Querist)
08 October 2011
Thanks for the answers..
btw Is due diligence compulsory in such situations? and who else besides a CA can do a DDR?
btw Is due diligence compulsory in such situations? and who else besides a CA can do a DDR?
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