Conversion of sole proprietor into company

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..... If a sole proprietor having its business as a builder desires to convert his business into a Pvt Ltd company. At what values should the closing stock of land be transfered to the company ? If it has to be tfd at market value, the will it amount to taxable business income for the sole proprietor. The sole proprietor will get more than 50% shares of the new company. Can the sole proprietor get salar .....

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..... y from the company later. - Reply By Rama Krishana - The Reply = To avail the benefit of exemption from capital gain on transfer in pursuance to conversion from sole proprietorship firm to company, you need to comply with the following conditions of section 47 of the Income Tax Act, 1961 ( xiv ) where a sole proprietary concern is succeeded by a company in the business carried on by it a .....

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..... s a result of which the sole proprietary concern sells or otherwise transfers any capital asset or intangible asset to the company : Provided that- ( a ) all the assets and liabilities of the sole proprietary concern relating to the business immediately before the succession become the assets and liabilities of the company; ( b ) the shareholding of the sole proprietor in the company is .....

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..... not less than fifty per cent of the total voting power in the company and his shareholding continues to remain as such for a period of five years from the date of the succession; and ( c ) the sole proprietor does not receive any consideration or benefit, directly or indirectly, in any form or manner, other than by way of allotment of shares in the company; - Conversion of sole proprietor in .....

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..... to company - Query Started By: - RAJESH SANGHVI Dated:- 5-2-2013 Income Tax - Got 1 Reply - Income Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax .....

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