A present running proprietary firm is to be closed and all it's movable and immovable properties, liabilities etc are to be given to a separately formed new private ltd company ? how to do this? What will be the steps.?
thanks and regards
anand (Administrative officer) (185 Points)
04 September 2010A present running proprietary firm is to be closed and all it's movable and immovable properties, liabilities etc are to be given to a separately formed new private ltd company ? how to do this? What will be the steps.?
thanks and regards
Jayant Suthar
(FCS, CWA)
(103 Points)
Replied 04 September 2010
Plz go through sec 47(xiv) of IT act.
yatheendra
(Article)
(89 Points)
Replied 04 September 2010
Dear Mr. Anand
A proprietary firm cann't be converted into a pvt ltd company as it requires atleast two members to form a company,unlike the prop firm it requires single person. It is advisable to incorporate a new pvt ltd with similar objective of the prop firm and then take over all the assets and liabilities & buisiness of the prop firm (or) we can incorporate a new pvt ltd company with an objective to take over all the assets and liabilities & buisiness of prop firm. All provisons for incorporating a new private limited company will apply.
vivek
(CS)
(751 Points)
Replied 04 September 2010
yatheendra
(Article)
(89 Points)
Replied 04 September 2010
Hi Mr. Vivek
The information you posted is all about how to convert a partnership firm to a pvt ltd company, but here is not that case. How can you hold a meeting for partners? It is a proprietary firm means a type of buisiness which is owned and run by one individual.
vivek
(CS)
(751 Points)
Replied 04 September 2010
yatheendra
(Article)
(89 Points)
Replied 04 September 2010
yeah....... Mr Vivek, thats what my opinoin and i posted. Being CS you people have more clarity in this issue. Regards
vivek
(CS)
(751 Points)
Replied 04 September 2010
vivek
(CS)
(751 Points)
Replied 04 September 2010
vivek
(CS)
(751 Points)
Replied 04 September 2010
anand
(Administrative officer)
(185 Points)
Replied 04 September 2010
Originally posted by : vivek | ||
Source of above article: https://taxworry.com/how-to-save-tax-on-conversion-of-proprietorship-firm-into-a-company/ |
thanks friends. You have done a great job for me and done favor on me. i was looking for this since long.
three queries on this.--
1. An agreement of take over of bussiness has to be executed for this. Correct ? bussiness of a proprietary firm can not be transfered just by making balnce sheet of proprietary firm to zero and showing the assets and liabilities of proprietary firm into the balance sheet of private limited company.
In my view ' take over agreement' must be executed with details of all assets and liabilities. right ?
2. What shall be the stamp duty on this take over agreement ? i think section 47 (xiv) of IT act clearly states that this take over agreement shall not require stamp duty required for ordinary transfer of movable and immovable properties and it can easily be executed on Rs 100/- stamp paper . right ?
3. If the proprietor still continues to do the bussiness through previous firm, how to stop this ?
thanks and regards
Hitesh Khemchandani
(Practicing Consultant)
(43 Points)
Replied 07 November 2010
Dear Vivek,
I understood the various aspects for conversion of Proprietorship to Private limited company. Can you tell what intimations and process needs to be followed for ROC for takeover of the proprietorship firm. Also do we have to send any initimation to the IT department
Regards
Hitesh
anand
(Administrative officer)
(185 Points)
Replied 03 June 2011
Originally posted by : khemhitesh | ||
Dear Vivek, I understood the various aspects for conversion of Proprietorship to Private limited company. Can you tell what intimations and process needs to be followed for ROC for takeover of the proprietorship firm. Also do we have to send any initimation to the IT department Regards Hitesh |
Can proprietary firm be converted to a pvt ltd company by following way-
'Close the proprietary firm by relinquishing officially it's licenses like service tax, trade license, shop act license etc and close the bank account. And then form a new pvt ltd company. Is this possible ? I think only problem involved in this could be the bussiness might suffer after formalities of cancelling licenses till incorporation of a new pvt ltd company.
Whats your opinion on this friends?
anand
Kartikeya Goyal
(Employment)
(35 Points)
Replied 05 March 2012
Thanks for your valuable information, I really appreciate it.
I need your help further :
in my clients case
- the company is an existing closely held company (with son and daughter-in-law as directors), a trading entity of products manufactured by proprietary concern,
which wants to take over the proprietary concern owned by the father, which is a manufacturing entity.
and they are planning to take manufacturing license in the Company as succession
So, in this case, can this be termed as succession under IT Act and Can they enjoy the Capital Gains exemption.
Please reply at the earliest as they wish to acquire on 31st March and also would appreciate if you can check and advise over the following process / steps as to whether they are in order or needs some amendments:
Steps for Acquiring:
1. Hold a Board meeting for moving proposal for takeover of business and to do the needful activities
Regards,
Indranil
(Chartered Accountant)
(177 Points)
Replied 07 November 2012
My Question is.
Will the Take Over agreement has to be Registered? or a Simple take over agreement on a 100 Rs Stamp paper duly notarised will do?
Pls hlp
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