Company being governed by companies Act 2013 has many regulatory compliance such as Audit of financial statement, minimum number of meetings, maintenance of statutory records etc. and LLP has less compliance as compared to company. LLP is also registered business organization so company whose turnover is reducing regularly but to expand its business and want its compliances to be minimum then LLP is the best form of organization.
Following are some of the impacts of conversion of Company into LLP:
Section 47 of the Income Tax Act, 1961 provides for certain transaction which is not regarded as transfer therefore no capital gain tax shall arise on them. As per this section transfer of capital assets or intangible assets by private company or unlisted public company to LLP shall not be regarded as transfer for capital gain if it satisfies following conditions:
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