proprietory firm to pvt ltd company

see sec. 47(xiv) of IT act

thanks Jayant. You have done a great favor on me.  i was looking for this since long.

three queries on this.--

1. But the 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

Dear,

1. u r right u hv to execute a agreement and u hv also state in MOA of the proposed company to takeover that proporietory business.

2. u hv to draw a balance sheet of proporietory business up to one day before of Date of Incorporation of the company and file with Income tax deptt. thereafter the same balance sheet will reflect in pvt ltd. co. as on incorporation date of the company.

regards

Dear Anand,

If your proprietary concern is changed into private limited company in Andhra Pradesh then it is required to pay the stamp duty for the value of the property as per A.P. Registration and Stamp Act.

S.A.Narasimha Rao Karri

Dear Anand,

After execution of the documents, you have to pay stamp duty while furnishing the documents executed to notify that the immovable assets belonging to the proprietary concern into the assets of company with the cocerned Sub-Registrar, where the property is located.

S.A.NARASIMHA RAO KARRI

ADVOCATE

regarding stamp duty, i think sec 47(xiv) of IT act can come to help. It is very clear also.

as per sec 47 (xiv) taking over of proprietary firm by private limited company is not considered as a regular transfer and hence only Rs 100/- shall be the stamp duty. (in my opinion).

No sir you have to pay stamp duty as per state laws, yes you can adopt partnership method.