Question on huf

Father passed away in Feb 2019 with two sons and mother left behind. He had an HUF with no property but HUF had loaned some money to other family businesses.

Questions: 

- Does the HUF automatically transition to Elder son ? or we need to do something here ?

- How do we determine who were members of HUF and who were coparcener's when it was formed or by default everyone in family is a member and it is understood that both sons are coparcener?

- Can the younger son demand separation of HUF and in that case how will the assets / money of the HUF is handled ?

- Does this mean that the money loaned by HUF has equal right of all coparcener and members in equal share?

Thanks

Sanjay

Replies (5)

Additional question - Can Mother become the Karta of HUF as father named her on everything in the Will.

 
 

- Does the HUF automatically transition to Elder son ?

Yes, but only as KARTA

or we need to do something here ? ........ Inform the same to related parties.

- How do we determine who were members of HUF and who were coparcener's when it was formed or

By default everyone in family is either member/coparcener as existed before.

- Can the younger son demand separation of HUF and in that case how will the assets / money of the HUF is handled?
Any Coparcener can demand for dissolution of HUF and as such equal partition of the property/assets.


- Does this mean that the money loaned by HUF has equal right of all coparcener and members in equal share?
YES

 
 
 

Can Mother become the Karta of HUF as father named her on everything in the Will.

No.... Not in this case.

 

 

Thank you for your message. 

Some follow up question. The HUF has loaned 30 lacs to another company on whose balance sheet that loan reflects as a liability. There are two copercener (sons) and 1 member (mother) left after father passed away. 

- One of the son's wants to divide the HUF ? If that happens; will it become Two HUF of same names?

- Are the wifes and children of the the copercener also considered members ? 

If they decide to dissolve the HUF 

- Will the loan be now equally divided between all copercener and members ?

- If Yes, how will that now be reflected on the balance sheet of company; as a loan for each of these individuals ?

 
 

There are two copercener (sons) and 1 member (mother) left after father passed away. 

That's wrong. The family members of the brothers are also to be included.

- One of the son's wants to divide the HUF ? If that happens; will it become Two HUF of same names?
Father's HUF gets dissolved, the receipts can be inherited by sons' HUFs.


- Are the wifes and children of the the copercener also considered members ? 

Yes, children as coparceners & wives as member

If they decide to dissolve the HUF 

- Will the loan be now equally divided between all copercener and members ?

YES

- If Yes, how will that now be reflected on the balance sheet of company; as a loan for each of these individuals ?

The amount is first transferred to original HUF account. After dissolution of it new members or HUF may give loan afresh.

 

 

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