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.

AI Summary

Brother Exiting Family Business Seeks Asset Transfer; Consults on Minimizing Tax Liabilities Under Family Settlement Agreement. A family business, operated as a private limited company, involves three brothers as equal shareholders. One brother, wishing to exit the business, plans to relinquish his shareholding in exchange for two company assets as part of a family settlement. The inquiry seeks options for transferring these assets to the exiting brother's name while minimizing tax liabilities for both the company and the brother. The response suggests consulting a Chartered Accountant for professional advice on managing the transfer and associated tax implications.