Transfer of Shares

[CLARENCE PEREIRA]

I have a Company with all shares held by Family Members. There are 2 other Companies which are 100% held by the first Company. I want to issue shares to the Family Members of the 2 Companies in the same proportion as held in the first Company. Can I do this without any share consideration/capital gains for the first Company? as the shareholders of the first Company are de facto shareholders of the other 2 Companies.

[DR.MARIAPPAN GOVINDARAJAN]

Have you got cleared on this issue, Sir?

[Ganeshan Kalyani]

Sir, I agree with Sri Kasturi Sir. Also I would like to seek answer of the query from Sri Mariappan sir to enrich my knowledge. Thanks.

[DR.MARIAPPAN GOVINDARAJAN]

Despite the fact indicated by Shri Sethi and Shri Ganesh, it is the purpose of getting clearance of the query. As such I requested the querist whether he got clarified in the said issue.

AI Summary

Transfer without consideration may still trigger capital gains implications for the holding company when reallocating subsidiary shares. The querist proposes issuing shares in two wholly owned subsidiaries directly to the holding company's family shareholders in identical proportional interests and asks whether those issuances can occur without share consideration and without attracting capital gains consequences for the holding company; forum replies request clarification but provide no definitive legal conclusion.