Capital Gain Tax on conversion of company into LLP

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Convert Business

A company satisfying all the following conditions can convert into LLP without attracting capital gain tax

1. Assets and liability of the company become the assets and liabilities of LLP

2. All shareholders of the company become partners of LLP with same shareholding ratio

3. Shareholders of the LLP shall be receive anything other than share in the profit and capital contribution in the LLP

4. Total profit sharing ratio of shareholders of the company in the LLP shall not be less than 50 % during the period of 5 years from the date of conversion.

5. Turnover of the company in any of the last 3 financial year does not exceed Rs.60 lakhs

6. Accumulated profit standing on the date of conversion shall not be distributed for a period of 3 years