Hi all,
I am working in a manufacturing concern, its pvt. ltd. Co. , we are manufacturing 2-3 products. now my management wants to separate one product and convert it in to a proprietorship concern, of which my co. wants to be proprietor.Is it possible to separate one product of the co and give it a different name, if yes, what foramlities are to be completed, pls guide.
regards,
Poonam
A company- private or public can become member of another company. It may become a partner in a partnership firm. But a company becoming a proprietory to another sole trading concern may not be possible.
will u pls refer the section of naything else where it is stated that a Co. can not become a proprietor of any other concern
I could not give you any sections. But my humble submission is that we have been taught by our company law gurus that a company is a separate legal entity distinct from its members ( Solomon Vs. Solomon & Co.,). So in a way a company itself is a sole proprietor for its business and taxable for the income which has to be payable out of its own funds. If it starts a business under a sole trading concen then automatically it also comes under its entity and taxable under the same PAN. Views are expected form experts. But in your case the separate product can be done through a separate DIVISION of the company. I know one company is engaged in providing corporate solutions(consultancy) activitiy and run a separate management training activity under a separate division and have two different Service tax code numbers but taxable to income tax under same PAN number.
CAclubindia
