Hey, I am creating a platform to allow users to fractionally own a asset.(Electrical machine). This asset will generate revenue and every owner will be given their share. I want to do this by creating a LLP of all the owners. The procedure I will follow:- 1) I will buy the machine. 2) Sell 49% stake of the machine to fractional owners for a period of time. 3) Create a LLP with all the owners including me. 4) Machine generates a revenue of Rs 1 lakh, this will be distributed to all the stake owners according to their ownership. 5) After the period of time, I will be sole owner of the machine. I want to know if this process is legal and if it is what is the technical term for this. What are tax implications for the owners, how is tax calculated on the gains we get in this period. I have heard that one has to pay flat 30% tax if it is LLP. Are there any ways to reduce that? Please let me know
- Selling stake of 49% in the machinery would attract income tax implications.
- Yes LLP is taxable flat @30%.
- Instead of selling a stake, you may develop some feasible return schemes subject to the law of the land.
For detailed discussion, you may opt for phone consultation.
You can create an LLP with proportionate ownership to all such persons but you cannot do it for specifically for a machine.
Also, how will later you will be the sole owner of the machine.
All, the partners would be partners of the LLP.
Profit of firm will be taxable at 31.2% for income upto Rs. 1 crore.
Hope you find the information helpful, if yes do rate if 5 and provide your valuable feedback for my improvement.
Thank you.
