Saving ₹40 Lakhs in Annual Tax Liability for a Mid-Market Trading Company

A family-owned trading business in Tamil Nadu, ₹18 crore turnover — restructuring for a private equity partner the previous CA said wasn't viable.

Client Profile

A family-owned trading business in Tamil Nadu with annual turnover of ₹18 crore, structured as a proprietorship, with plans to onboard a private equity partner.

₹40LEffective tax saving achieved in Year 1 of restructuring

IndustryTrading

Annual Turnover₹18 Crore

Original StructureProprietorship

Restructuring Timeline90 Days

The Challenge

The business had been filing taxes as a proprietorship for 12 years. With PE interest incoming, the promoter needed a cleaner entity structure — but the conversion carried significant stamp duty and capital gains implications. The previous CA had advised against any restructuring.

12 years of filing as a proprietorship
Significant stamp duty implications on conversion
Capital gains exposure on entity change
Previous CA advised against restructuring entirely

Saving ₹40 Lakhs in Annual Tax Liability for a Mid-Market Trading Company

Our Approach

What We
Did About It.

We modelled four different restructuring scenarios before identifying the one that minimised tax incidence while clearing the path for the PE transaction.

Scenario Modelling

Four distinct restructuring paths modelled, including a partnership-to-LLP conversion, private limited incorporation, and a slump sale arrangement.

Phased Business Transfer

A phased transfer structure identified to minimise tax incidence and stamp duty.

Strategic Timing

Transaction timing aligned to reduce capital gains and stamp duty exposure.

FEMA Alignment

Structure designed to align with FEMA regulations ahead of the proposed PE entry.

The Outcome

Effective tax saving of ₹40 lakhs in Year 1 of restructuring. Clean entity structure completed within 90 days. PE transaction closed successfully. The family now operates through a professionally structured holding company with Fincom Insights as their ongoing CFO advisor.

The right advice, at the right time, with the right modelling, changes what is possible. A different CA told this family that restructuring was not viable. We found four paths — and executed the best one.