Change of proprietorship
k.s.abishek
(Querist) 06 May 2012
This query is : Resolved
I have a geospatial firm and iam sole proprietor for the firm and now i would like to transfer the proprietorship to my husband is it possible if yes please say me the procedure.
A V Vishal
(Expert) 06 May 2012
You can gift the proprietary rights to your husband
Raj Kumar Makkad
(Expert) 06 May 2012
There is no requirement of any formal document for the transfer of proprietorship firm in the name of any other person but if you want to get it registered then can do so without any legal problem.
R.RAJENDRAN
(Expert) 07 May 2012
Under the relevant enactments of taxation ( indirect and direct) procedures are prescribed for change of proprietor ship firm.
The important aspect is whether the tax liability is also transferred along with proprietor ship to your husband.
This must be clearly and unambiguously revealed to the tax authorities to enable them to levy and collect the tax due the period prior to the change of proprietor ship as otherwise it would lead to litigation with the Government and also huge penalty burden.
SURENDRA KUMAR RAKHECHA
(Expert) 08 May 2012
In addition to the above valued advice from the experts; I wish to add the following :
1. The change in the proprietorship may not be suitable if it has some fixed assets in its balance sheet ( the fair market value of which is more than its book value as it will attract capital gains ).
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2. If there are certain licenses from the government agencies in the name of the present firm; then such licenses are to be converted in the name of new proprietor by making fresh applications to the government or other agencies.
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3. If fixed assets are not to be transferred then the same may be rented to the new firm. ( One of the best option ).
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