URGENT :Buy back of own unlisted shares by a Pvt Ltd Co.

This query is : Open

CMA. Subhash Kumar Jha (Querist)
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23 March 2011 We are a pvt ltd co & wants to buy back our own shares from our ex directors / ex-employees.

Suppose, these shares were issued 5 years ago @ 10/- & now we want to take it back @ 20/- each.

What will be the tax implications for both (pvt ltd co) & for ex- employees ??

Its urgent.

Thanks

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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24 March 2011 Dear Subash Ji do you want to say that the company has been taken over. In that case the share is company held by earlier directors will be acquired by the new directors. No effect on company. In pvt ltd company no buyback is applicable. Only when the ownership changes the share will be transferred for consideration. Say In a pvt ltd company...X & Y r directors now the company has changed hands and A & B are new directors. In this case the new directors A & B will purchase the shares from X & Y for consideration and any gain will be treated as Capital Gain.

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Querist)
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24 March 2011 Company has not been taken over.

Some of the ex employees & one ex director is still the shareholder of this company.

Now the company wants to offer them a price (original price was 10/-), of ...say 25/- for buying back those shares from them.

Now please clarify..

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