conversion of Pvt. Ltd to LLP

[Guest]

Resp. Professionals,

 

​Below mentioned point is one of the essential requirement for Tax exemption of conversion of Company to LLP.

 

·       The aggregate of profit sharing ration of Pvt Ltd shareholders shall not be less than 50 percent in next 5 years

And my query is 

Query: If out of 10 shareholders, 4 are resigned later on but profit sharing remains same among continuing 6 partners, is it in compliance of above clause ?

[Guest]

NOT YET SIR. PLS GIVE UR OPINION.

AI Summary

Tax exemption condition for conversion to LLP: whether resignation of shareholders affects compliance when original shareholders retain majority profit share. Tax exemption on conversion to LLP requires the aggregate profit sharing ratio of the private company's shareholders to be not less than fifty percent for the next five years. The query asks whether, if some original shareholders resign but continuing original shareholders retain the same profit shares so the aggregate attributable profit share remains unchanged, that situation complies with the fifty percent profit sharing requirement.