kushal jain (Executive) 13 June 2015

Transfer of business

Hi Experts,

Here is a situation of dead lock of business, where in a company there are 3 directors of which one dorectors is dispute with other and want to take away all his clents from this ABC Ltd company to his newly formed company XYZ Ltd and even all his client are ready to contract with new company i.e. XYZ ltd can this is possible can the other director take legal action against this action of taking away clients and even emplyees to new company ???

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5 Replies

N R Dash.. (Advocate) 13 June 2015

There lways remains a foreclosure or termination clause in the contract or agreement between parties. Refer to that.

Further, without checking your MOA & AOA it is very difficult to give you any advise regarding the prosecution of the director.

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 ) 20 June 2015

Resolution has to pass in ABC ltd. for removal of the director from the position and notice to public.

Krishna. Advocate (Advocate) 16 July 2015

Please Contact
T.C Krishna
Lawyer
Corporate and Labor Law
09447963440

S K KARNjhc (Legal Adviser) 21 July 2015

Good suggestion by learned ramacharya sir

Antoinemcox 31 July 2015

1.1 The Value Added Tax Consolidation Act 2010 (the VAT Act) provides that a transfer of ownership of goods, being the transfer to an accountable person of a totality of the assets or part thereof, of a business, even if that business or part thereof had ceased trading, where those transferred assets constitute an undertaking or part of an undertaking capable of being operated on an independent basis, is deemed not to be a supply for VAT purposes. Similar provisions apply as regards the transfer of goodwill or other intangible assets between accountable persons.

1.2 These provisions are important trade facilitation measures aimed at reducing compliance costs for traders involved in this type of transaction. However, traders are advised that when they are involved in a transfer of this type, particularly as an acquirer of a totality of assets or part thereof of a business which might constitute an undertaking or part thereof capable of being operated on an independent basis, they should, in cases of doubt, check with their local Revenue District office before paying any VAT invoiced by the vendor in such circumstances. Where such a transfer is involved it is important to note that any VAT paid by a purchaser to a vendor in error will not be deductible as no supply is deemed to have taken place.

1.3 This leaflet does not refer to the transfer of a business by means of the transfer of shares in a company. Such a supply is exempt from VAT in accordance with paragraph 6(1) of Schedule 1 to the VAT Consolidation Act.

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