Section 47(xiiib) - Conversion of unlisted company to LLP - Income Tax - Ready Reckoner - Income Tax

Section 47(xiiib) - Conversion of unlisted company to LLP Section Transaction not regarded as transfer Transferor u/s 2(47) Transferee u/s 2(47) Capital asset involved u/s 2(14) 47(xiiib) Conversion of Unlisted Company (whether public or private) to a Limited Liability Partnership Unlisted Company LLP All assets and Liabilities immediately prior to conversion NOTE: The following conditions must be satisfied to be covered u/s 47(xiiib) :- All the assets and liabilities of the company immediately before the conversion become the assets and liabilities of the limited liability partnership. All the shareholders of the company immediately before the conversion become the partners of the limited liability partnership and their capital contribution and profit sharing ratio in the limited liability partnership are in the same proportion as their shareholding in the company on the date of conversion The shareholders of the company do not receive any consideration or benefit, directly or indirectly, in any form or manner, other than by way of share in profit and capital contribution in the limited liability partnership The aggregate of the profit sharing ratio of the shareholders of the company in the limited liability partnership shall not be less than 50% at any time during the period of five years from the date of conversion The total sales, turnover or gross receipts in business of the company in any of the three previous years preceding the previous year in which the conversion takes place does not exceed ₹ 60 Lakhs. The total value of the assets as appearing in the books of account of the company in any of the three previous years preceding the previous year in which the conversion takes place does not exceed ₹ 5 Crore and No amount is paid, either directly or indirectly, to any partner out of balance of accumulated profit standing in the accounts of the company on the date of conversion for a period of three years from the date of conversion.