Transfer of Assets by Private Limited Company to its shareholder

[IRFAN MALIK]

Dear Sir/Madam,

My query is with regards to Income Tax & Companies Act.

A particular family has a business with 3 brothers of whom all are equal shareholders in a private Limited company.

All assets are registered in the name of Pvt.Ltd. Company.

Now 1 of the brother, Mr.A wants to exit the family business and in lieu of exit he needs to relinquish his shareholding in the company.

Now Mr.A gets a 2 assets of the company as part of the partition of family business & company runned by family.

Now what are the options available to Mr.A to take over & get the 2 assets of the company transferred in his name. This 2 assets, he has received are part of family settlement. Against receipt of these 2 assets, Mr.A will relinquish his shareholding in the company.

What are the options available with Mr.A to ensure that there is nominal tax liability on the company & him after transfer of 2 assets in favor of Mr.A.

[DR.MARIAPPAN GOVINDARAJAN]

Got the advice of Chartered Accountant.

AI Summary

Transfer of company assets: seeking tax-efficient options for a shareholder exit via family settlement. A shareholder of a family-run private limited company proposes to relinquish his shareholding in exchange for two company-registered assets received under a family settlement, and seeks options to transfer those assets into his name while minimizing Income Tax and Companies Act consequences; a Chartered Accountant's advice was obtained but its substance is not included.