Continuity of Business in Sole Proprietorship
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Continuity of business in event of death of proprietor
I have a wife, one son and two married daughters. I am running manufacturing business as a proprietor. In the event of my intestate death, 1. I would like my son to continue running my business as usual. We have corporate clients and cannot afford to close our business for even one day. Will it be possible for him to do so? 2. If not, then what form of constitution can I make/change during my lifetime so that he can run the business and undergo least and minimum hassle to continue running the business?
Asked 1 year ago in Property Law
Religion: Hindu
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10 Answers
Change your firm from a sole proprietorship firm to a full registered partnership firm wherein you son is also a shareholder. Your shares should devolve in his favour after you.such a provision may be incorporated into the partnership deed.
Advocate, Lucknow
13807 Answers
65 Consultations
You can execute will bequeathing your business to son . Your daughters can be witness to your will
2) As per section 22(3) of the CGST Act, the transferee or the successor, as the case may be, shall be liable to be registered with effect from the date of such transfer or succession, where a business is transferred to another person for any reasons including death of the proprietor. While filing application in FORM GST REG-01 electronically in the common portal the applicant is required to mention the reason to obtain registration
3) you can during your lifetime convert your proprietorship concern to partnership firm by adding your wife and son as partners .
Advocate, Mumbai
88634 Answers
6279 Consultations
In case ofdeath of thesole proprietor, his legal heirs can legally continue thebusiness but other legal compliance, either fresh firm will form or legal heirs will replace.
You have to apply in same office which have issued certificate enclosingdeath certificate and legal heir certificate if required by authority.
In case ofdeath of sole proprietor, if the business is continued by any person being transferee or successor of business, it shall be construed astransfer of business.
transfer or change in the ownership of business will include transfer or change in the ownership of business due to death of the sole proprietor.
A circular issued by the Central Board of Indirect Taxes and Customs (CBIC) mentioned that the transferee or the successor, will be liable to be registered with effect from the date of such transfer or succession, where a business is transferred to another person for any reasons, including death of the proprietor. Here the applicant will be required to mention the reason to obtain registration as 'death of the proprietor,' in the registration form (GST REG-01) to be filed electronically in the common portal.
Advocate, Vellore
78792 Answers
1576 Consultations
- As per law, after the death of father intestate , his property would be devolved upon all the legal heirs equally .
1. Yes , if you will left a WILL for the same , otherwise the income of that business can be claimed by other family members
2. Yes, you can make as this is your self acquired business , hence you having your right to authorize your son for running your business.
Advocate, Delhi
10104 Answers
122 Consultations
Hi, It is better you can change the nature of the business from Proprietor to Partnership Firm and you can include your son as partner so that you can run business continuously.
Advocate, Bangalore
5408 Answers
311 Consultations
Dear Sir/Madam,
It is suggested that you write a WILL in favour of your son and authorise him to continue the business. Alternatively, you can form a partnership with him without affecting your clients and in the partnership, authorise him to deal the things in case of some unfortunate happening.
Advocate, New Delhi
6646 Answers
16 Consultations
1. In the event of your intestate death, all your movable and immovable properties get devolved equally to your mother ( if alive ), your wife, son and two daughters, including your present business.
2. If you would like your son to continue running your business after your lifetime, execute WILL and mention clearly that your son should alone be the beneficiary, after your death. business. Or you can gift the business to your son by executing a registered Gift Deed in his favour and let your son accept the Gift.
Advocate, Bangalore
4258 Answers
258 Consultations
1. In case of your demise intestate, all your legal heirs will be the co-owner of your proprietorship business including your son. You can register a conditional gift deed transferring the said business to your son with the condition that you shall run the business yourself till your demise.
2. You can follow the procedure suggested above. Alternatively you can convert your business to a partnership firm now or write a will accordingly.
Advocate, Kolkata
26743 Answers
726 Consultations
Dear Sir
So as to prevent any confusion after your death, it would be best advised that you draft and register your will naming your son as your legal heir.
In case you are a sole-proprietor of this business, there is no legal distinction between you and the business.
Thank you
Advocate, Bangalore
5151 Answers
53 Consultations
The existence of the said proprietary firm ceases after death of sole proprietor. But operation can be continued by legal heirs by coming on record as a fresh sole proprietor
Advocate, Mumbai
27760 Answers
89 Consultations
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