Three private limited companies and one proprietorship firm engaged
in the same line of business decides to merge into one as per the
provision of the Part IX of the Companies Act, 1956. They had formed
a partnership on the first day of January, 2008 by transferring all
the fixed assets(only fixed assets) of the firm at the net book value
as on 01.04.2007. At the time of making the partnership they had
included some spouses of the managing directors of the companies
into the partnership firm to make the number 7. As the parties are
having credit facilities with different banks, the process will be
taking some time, during the course of which the partnership firm
carries on the business.
Now the queries are as under:
1. Since the fixed assets are transferred on 01.01.2008, what
will be eligibility for depreciation in the hands of the
individuals/companies and the partnership firm.
a) Whether the proprietorship/companies can charge full
depreciatin on the assets transferred as the same is put to use for
more than 180 days.
b) Whether it is possible for the newly formed partnership firm
not to charge depreciation.
c) Or in which other way the depreciation can be claimed by the
entities.
2. Whether the capital gains will be attracted in this case,
when the assets are transferred to the partnership firm and later on
the partnership firm is converted into a company as per the
provisions of Part IX of the Companies Act, 1956.
3. Even though the assets are transferred to the partnership
firm, the original owners uses the fixed assets for their business in
their individual capacity. Whether the partnership firm is required
to change any rent/service charges for usage of the assets legally
owned by the firm.
A detailed clarification in this regard will be highly appreciated.
Thanks in advance.
