Lease deed for private company before incorporation


22 August 2018

I am incorporating a new private limited company in MCA(RoC)
So, I am leasing a property for 3 years. But the company isn't Incorporated yet !!!

Question 1 - How/What kind of lease deed I should make ?
Question 2 - Is there any special changes I should make to lease deed ?
Question 3 - Should I register my lease deed ?
Question 4 - Is there any tax payable by lease / lessee ?
Question 5 - What are the things should I keep in mind while making lease deed ?

Thank you

Dr J C Vashista (Expert)
23 August 2018

You are required to share your income with a local prudent lawyer for proper guidance and proceeding.

M V Gupta (Expert)
24 August 2018

My replies to your query are as under:
Q1 & 3.. After the Company is incorporated you may execute the lease deed on proper stamp paper and register it.
Q2. Changes cannot be suggested here. Get the lease deed drafted by your Advocate.
Q4. The lessee company should deduct tax under Sc 194I of IT Act while paying rent to the land lord and deposit it with the IT Department within one month and issue certificate of deduction to the land lord.
Q5. None .

Urvashi (Querist)
24 August 2018

Sir thank you so much for your answers
Actually I wanted to know how can a company which isn't incorporated yet can create a lease deed ?
Under which name the lease deed should be made ?

M V Gupta (Expert)
25 August 2018

If it is necessary to procure the property before incorporation of the Company, it can be done by the Promoter of the Company by getting the documents executed in his name as Promoter of the proposed Company and using the initial contribution of the promoters towards capital of the Company for purchasing it. In such a case the Promoter will have to take steps as provided in the Comapnies Act, 2013 to get the property transferred in to the name of the Company.

Urvashi (Querist)
25 August 2018

Lease deed should be made on any of the Promoter/Director name ?
That he/she have rights over the property for a certain period of time

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