TaxTMI 
TaxTMI 
how to compute the tax liabiltity for land development business
12 Dec 2010 
5 Replies 
1443 Views Asked by
Choice of business entity affects governance and tax incidence for land development; prioritize management and capital structure over tax differences.
Choice of entity for a land development business affects legal personality and management: a private limited company offers a separate legal identity and centralized management suitable for many members but involves longer incorporation and higher initial costs; a partnership firm is easier to form but requires clear operational arrangements among active partners. Tax computation treats land purchasing and selling as business income and, per respondents, companies and firms face comparable tax incidence; therefore entity selection should be guided by governance, capital contribution form, management delegation, and member stability rather than by tax differential. (AI Summary)
Choice of entity for a land development business affects legal personality and management: a private limited company offers a separate legal identity and centralized management suitable for many members but involves longer incorporation and higher initial costs; a partnership firm is easier to form but requires clear operational arrangements among active partners. Tax computation treats land purchasing and selling as business income and, per respondents, companies and firms face comparable tax incidence; therefore entity selection should be guided by governance, capital contribution form, management delegation, and member stability rather than by tax differential. (AI Summary)
Myself and other friends totally 20 members,are interested in doing the business of land purchasing and selling (land developing) real estate nature. whether we should form a partnership firm or Pvt Ltd Company, which is best suitable for our business and how is the tax computed on our business.. Please guide me..