Transfer of proprietorship
kamal mehta
(Querist) 07 March 2012
This query is : Resolved
I am a proprietor of two firms both into services.
For Firm A- I am registered for service tax,although because of its turnover it does not fall under the purview of the same.
For Firm B -No service tax registration-Turnover is negligible
Both firms are running in loss,however I want to continue in the hope of a turn around sometime.
I wish to transfer the proprietorship of both firms in my wife's name.
I do not want to create a partnership or pvt ltd company.
Kindly advise on the following:-
Process- Sale/Gift/Book/Paper transfer
Bank Accts-How the change to be affected?
Service Tax:-Closing the one in my name? Whether a new one required in my wife's name or not in view of turnover?
Thanks & Regard
Kamal
Raj Kumar Makkad
(Expert) 07 March 2012
You may gift your entire business as desired in favour of your wife and thereafter you shall have to close the bank account and your wife can open it afresh as proprietorship and individual status of a person is same. Bank acount of an individual cannot be transferred in the name of donee. Same is the position with the service tax account.
adv. rajeev ( rajoo )
(Expert) 07 March 2012
Let her take over the firm. Draft a memorandum in this reagard.
C. P. CHUGH
(Expert) 07 March 2012
Agree with experts. Once you decide to transfer/closing down of your business, you have to surrender your registration certificate under Service Tax Act. Close down your Bank Account, preferably you showld square up your outside liabilites and assets and then draft a memorandum of transfer between you and your wife. She may or may not pay the consideration (if any). She in turn is required to open a fresh bank account as Proprietor, apply afresh for registration nder Service Tax Act accordingly. Thanks
kamal mehta
(Querist) 08 March 2012
Thanks for the prompt response, Experts Raj K Makkad,Rajeev,Nadeem and CP Chugh.
Please also advise on the contents of the memorandum of transfer.Can I find it in some kind of reference or on the internet?
Should my wife apply for service tax or not in the backdrop of the following:-
a) Current/Future turnover/billing less than 10lacs.
b) However some existing/ongoing clients
of Firm A currently being charged service tax.
Thanks & Regards
