Other legal entities specific to this sector may also apply, depending on the industry. A business divestment agreement is structured in such a way that it results in a complete sale of assets and liabilities from one entity to another. It is a form of purchase and ownership contract that records information about the sale of the company and its assets. It describes the nature of the transfer, the type of sale, the terms of sale and the terms of the transfer. The business transfer contract lists assets, commitments, capital, contracts, client lists, leases, staff insurance, new labour rights, inventory, tax issues, copyright and patents. The transfer of an « ongoing business » can be simply called a transfer of a current business, which can be exercised by the buyer as an independent entity. The internationally recognized guidelines) issued by His Majesty`s Revenue – Customs (HRMC) to treat business transfer as a day-to-day business are considered to fall within the aforementioned legal and judicial provisions, it can be inferred that a BTA, where it exists in the form of a sales agreement, is levied on the stamp duty covered in Article 5, point (c), Schedule I of the Stamps Act and the deed of transport intended to transfer the company`s assets, whether property or real estate, is levied on the nature of the transferred asset and on the stamp tax deed carried out to register such a transfer. To understand the impact of stamp duty on the immediate transaction, it is therefore necessary to analyze the nature of the asset to be transferred and the instrument by which it is transferred. The ability to sell a business as a current entity through a sale of Slump or, alternatively, through the independent sale of assets must be chosen by analyzing the different benefits and deficits of the type of transfer of the entity, which may vary from case to case. Prior to the introduction of Section 2 (42C), the courts held that the sale of Slump-Sale is a sale of a business on the basis of an ongoing business, if the flat price cannot be attributed to individual assets or liabilities. In CIT V.
Artex Manufacturing Co., apex Court treated the sale of the business as a retail sale as part of a permanent concern for a package, on the grounds that the break-in price had been determined by the appraiser on the basis of individual assets, while in CIT V. Electric Control Gear Mfg. Co. The sale of the transaction with an ongoing business was considered a burglary, since, in this case, there is no indication that the price of the intrusion is due to an asset. Section 2 (42C) of the Income Tax Act of 1961 recognizes « Slump-Sale » as a transfer of a « business, » that is, a party or entity or a division of businesses constituting a business activity when it is considered a whole. In other words, Slump Sale means transferring the entire business for a single plan, without assigning value to individual assets and liabilities. In the context of the break and enter, the business is sold on a « current interest basis » – the transfer of all assets/liabilities, contracts, employees, etc., so that the company can operate as before the sale. In re « Innovative Textile Ltd., » [2019 (4) TMI 1499 – AUTHORITY FOR ADVANCE RULINGS, UTTARAKHAND] is a saleswoman and manufactures textile yarns, fabrics and clothing. The applicant intends to sell its current manufacturing, marketing and sales of textile yarn and fabrics from the Plot No textile factory. B-8, Ph-1 , SIDCUL Industrial Park, Sitarganj, Udham Singh Nagar, Uttrakhand to S D Polytech (P) Ltd in the form of business transfer as a current business on a break-in basis as a whole with all assets and commitments.