TaxTMI 
TaxTMI 
TaxTMI 
conversion of partnership firm into a private limited company
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....onversion of partnership firm into a private limited company<br> Query (Issue) Started By: - AJIT Tiwary Dated:- 21-12-2022 Last Reply Date:- 22-6-2023 Corporate Laws / SEBI / LLP<br>Got 1 Reply<br>Companies Law<br>Dear Expert, one of my client is going to conversion/takeover to/by a private limited company. firm make its valuation, my concern is that whether we allot the equity share at par or a....
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....t a premium. as discuss with some one, one said that we need to take valuation of firm firstly and issue the share at premium and other said there is no need to take valuation of firm and equity share will be allotted on net asset basis. i need suggestion on that whether we issue equity share at par i.e net asset basis or at premium further, if i allot the share at premium whether capital gain wi....
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....ll be arises or not? and if i issue the share at premium then share premium will be reflected in reserve and surplus but what will be treatment in assets side. pls suggest Reply By Charu Tyagi: The Reply: Conversion of partnership firm into company 1. Issue of shares - share can be issue at premium and such premium amount will become part of reserves. 2. Value of shares - On the net assets ba....
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....sis 3. Treatment of transfer as Capital Gain ? - Section 47(xiii) of the Income Tax Act, provides certain condition by which conversion of partnership firm into company does not amount to transfer and therefore no "CAPITAL GAIN" Conditions - a) All of the assets & liabilities transfer to company. b) All of the partners become shareholders in the proportion of their capital standing....
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.... on the date of succession. c) Consideration to partners - only allotment of shares of company. d) Total voting power of the partners in company should not be lass than 50% during 5 years from the date of succession.<br> Discussion Forum - Knowledge Sharing ....