However, an agreement that covers the intention to sell a business with its assets is not a promotion, it is simply a sales contract. Here it is important to note that the sale can be done in two ways, one is a business sale and the other is a sale of assets. The type of sale determines which positions of the company should be part of the transfer of ownership. A buyer benefits from a sale of assets by making use of the amortization benefits at an early stage and avoiding the acquisition of the liabilities of the former business. However, from a seller`s perspective, the sale of a business is preferable to pay taxes at a low long-term capital rate compared to the higher normal tax rate applicable to the sale of assets. 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.
The buyer is associated with the company`s transfer agreement on the basis of the seller`s insurance and guarantees during negotiations between the parties. Here, the seller promises the buyer the assets and liabilities of the company. A seller admits that he is authorized to sell the business and that he has legal permissions under the law to sell the business. The insurance and guarantees provided by the seller in a transfer contract will be relatively broader than the buyer. This clause guarantees compliance with all future rights and obligations of the buyer. An example of such a clause can be – After the completion and signature by all parties, this Business Transfer Agreement constitutes a binding agreement between the parties, which allows them to conclude agreements for the handover of the company. “Statement.- For the purposes of this article, if, in the case of an agreement to sell real estate, the possession of a property is transferred to the purchaser prior to the execution of such a contract, without the execution of the corresponding transfer, so that this sale agreement is collected as the corresponding transport and stamp duty.B.