06-14-2011, 06:40 PM
Income tax paid by sole-proprietorship cannot as such become your asset since it is neither an amalgamation defined in the Companies Ordinance, 1984 nor a conversion of sole-proprietorship into a company under the required approvals. Advance tax consists of three things mainly; (i) the tax deducted by other parties against which they provide tax payment challans as proof of deduction (ii) tax paid on utility bills against which the business holds the paid utility bills as proof of payment (iii) tax paid by the business itself as quarterly advance tax under section 147 of the Income Tax Ordinance, 2001 for which it holds the paid tax challans as proof of payment. For treating any advance tax as your asset, you need to hold the aforesaid payment proofs. Now, since all such advance tax was paid by (or deducted on behalf of) the Sole-Proprietorship against its name and NTN, your company cannot claim it as its own asset. So, here again you will face similar issues as you are perceiving with respect to Sales Tax claims.
The bank accounts transferred (if any) would also similarly be in the name of Sole-Proprietorship or the Sole-proprietor. So, either you have to transfer the funds with the consent of previous owners (as they would be the signatories of such accounts as well instead of you) into companyâs new bank accounts. (The previous accounts may be closed then). Or, to change the âTitlesâ and âSignatoriesâ of such existing accounts with the consent of the previous signatories/owners. This would again entail same issues and process.
Quite similarly, you will also have to manage the issue of Utility connections which would obviously be in the name of previous owners. This would be necessary as you have to claim the utility expenses (and tax thereon) in companyâs books of account. Further, you also have to establish your right on the security deposits given by previous owners against such utility connections.
If you are into imports or exports, you also have to deal with SBP and Customs for change of name, particulars etc, as indicated in my previous post.
These all things entail similar efforts and process as I have narrated with respect to sales tax.
Regards
The bank accounts transferred (if any) would also similarly be in the name of Sole-Proprietorship or the Sole-proprietor. So, either you have to transfer the funds with the consent of previous owners (as they would be the signatories of such accounts as well instead of you) into companyâs new bank accounts. (The previous accounts may be closed then). Or, to change the âTitlesâ and âSignatoriesâ of such existing accounts with the consent of the previous signatories/owners. This would again entail same issues and process.
Quite similarly, you will also have to manage the issue of Utility connections which would obviously be in the name of previous owners. This would be necessary as you have to claim the utility expenses (and tax thereon) in companyâs books of account. Further, you also have to establish your right on the security deposits given by previous owners against such utility connections.
If you are into imports or exports, you also have to deal with SBP and Customs for change of name, particulars etc, as indicated in my previous post.
These all things entail similar efforts and process as I have narrated with respect to sales tax.
Regards
