A Sole Proprietor business has the Proprietor's Residential Properties and Vehicles appearing in his balance sheet.
Now suppose a Pvt. Ltd company plans to absorb that Sole Proprietor business. Can it acquire those properties and vehicles during acquisition. Can/Will the pvt. ltd. company have to make those properties in its name through transfer agreement?
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Acquisition of sole proprietorship
Replies (3)
All the assets can be acquired by the company. Since the Company is separate legal entity, assets should be transferred to Company name. Otherwise it will not be possible for company to sell/transfer those assets.
So, the nature of those residential properties (after transfer) will become as if the Pvt Ltd. company is making residential accomodation (like quarters by banks) for its directors and/or employees, right?
You are right, Company can use the property for the purposes which are permitted by the local municiple authority.
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