1. Introduction Businesses run by families are a prevalent norm in the country. For the continuous longevity of the family business, it is often fruitful to do succession planning, to avoid disputes and conflicts amongst various family members. Consequently, an effective succession planning process ensures that the allocation of assets and properties is in consonance … Read more
An effective scheme of buy back of shares can increase shareholders’ return and aid in distribution of surplus cash. Provision for taxability on buy back of shares Section 115QA of Income Tax Act, 1961 Rate of tax on buy back of shares 20% + surcharge + cess (HEC) Provision governing buy back of shares Section … Read more
Reduction of share capital under Section 66 of the Companies Act, 2013 , involves reducing the issued, subscribed, and paid-up share capital of a company. Such reduction can take on different forms, such as with or without payout, and can be selective for a specific class of shares. However, it does not include buy-back of … Read more
Demergers in India is undertaken to separate a business unit from a business structure, for reasons such as focusing on core operations or unlocking value for shareholders. Introduction to Demergers in India According to Section 2(19AA) of the Income Tax Act, 1961, demergers refer to a form of corporate restructuring wherein: One or more business … Read more
What is a Slump Sale Agreement ? Slump Sale agreement also known as business transfer agreement, is entered into between a Seller, who owns one or more business undertaking and a buyer, who intends to purchase such undertaking . It has to be prepared in Slump Sale agreement format. While there are several assets, tangible … Read more
Slump Sale Meaning ‘Slump sale’ meaning, relevant for Section 50B of the Income Tax Act, considers the following important aspects : – There is a transfer of one or more undertaking The transfer may be by any means (for cash consideration or through an exchange of shares/ other form of consideration) The transfer is for … Read more