Transfer of director's assets

punit (Querist) 16 May 2014 This query is : Resolved
In the case of Private Limited company whether Directors of the company transfer / surrender his personal assets to the company except by execution of Sale Deed or surrender deed. If there is any provision in companies act or Transfer of Property act then let me know.

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Guest (Expert) 16 May 2014
The question arises, what for and why the director wants to transfer/surrender personal assets to the company?

punit (Querist) 16 May 2014
Dear Sir, Since directors of the company are an owner of the land and they want to establish an industry over that land.

Guest (Expert) 16 May 2014
Sale or lease to the company is the altrernative. However consideration proce can be in the shape of additional shares of the company, if payment is not in cash/cheque.

punit (Querist) 16 May 2014
agreed through sale deed or lease deed property can be transferred to company / asset can be used by company but in both of these cases document need to get registered and registration charges have to be paid by party that's why i need some remedy for this.

Atlas Eva (Expert) 16 May 2014
For this matter, there are provisions in Companies Act.
The company needs to increase its share capital.
Lets assume that the land is worth 5 crores. Now the company increases its authorized capital to Rs 1 crore for which u need to pay stamp duty on just Rs 1 crore to the Registrar of Companies , which will be approximately Rs 4 lakhs

thereafter the company shall issue these fresh shares to the director at a premium.

so shares of 1cr sold at 5 cr. In this case of subscribtion of shares in Kind (not cash) will have to be reported to Registrar of Companies.

This is surely possible and can be done, the correct professional to do this is off course a Practising Company Secretary.
Contact one, and he will surely assist you.

Surrender K Singal (Expert) 18 May 2014
Pratising CS may be able to save taxes / duties as per his experiece- one way could be to let Company use your property without transferring it in company's name and you may enter into an agreement to be compensated for such use suitably which may also be useful for tax planning !

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