Sole Proprietorship

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 November 2009 One of the features of Sole Proprietorship Conern is that it has a limited life. On death of the owner, the business comes to an end. Now, I want to know that can such a conern be continued till the next legal heir takes over as a proprietor(say on 1.4.2010). Also can a return of income for the year 1.4.2009 to 31.3.2010 be filed under the PAN of the original proprietor who died, say in Sept. 09 for the activities done for the whole year till 31.3.2009 (as in her estate by the legal heir) or the balance sheet has to be necessarily split on the day of death and income accounted for in the respective books of the original and new proprietor.

Sunil

Sunil (Expert)
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16 November 2009 If the proprietor died without filing return for the assessment year 2009-2010, the administrator of the will or whichever legal heir is appointed as administrator in case of intestate death will file application to Income tax to be representative assessee for the deceased PAN holder and file the returns accordingly. The proprietorship concern can continue to be run by administrator till the matter is settled and the returns will continue to be filed as a representative assessee. Normally, for a trading concern or professional, the representative assessee normally closes the business and keeps the account alive till all outstandings are received and account is made and appropriated to the estate. In cases where there is manufacturing like a factory that involves labour, the administrator continues business for sometime in deceased proprietor's name with permission of court and the court then allows transfer of the proprietorship business to legal heirs. In case of testamentary death where it is specified who will be running the factory problems are less and succession certificate possible to be obtained soon. However in intestate death it takes a little time as there has to be an agreement and consensus of legal heirs involved.

Querist : Anonymous

Querist : Anonymous (Querist)

17 November 2009 My specific query is that can the proprietory concern of A in the name of ABC&Co. be carried on till 31.3.2010, if A dies on 21.09.2009 as an estate of A without the legal heir taking over ABC&Co. till 31.3.2010