sole proprietorship

Options After Death

The death of a sole proprietor does not mean operations immediately cease, however. If the sole proprietor authorized his personal representative to care for the business upon her death, the operations may continue. Additionally, the sole proprietor’s heirs could choose to continue the business, either as a new sole proprietorship or as some other business form.

Potential Concerns

Choosing to continue operations after the original sole proprietor dies is potentially problematic. Sole proprietors are personally liable for the debts and obligations of the business. Creditor claims against the business would typically need to be brought against the original sole proprietor’s estate, but choosing to continue operations could expose the successor entrepreneurs to liability for claims that arose when the original sole proprietor was alive.

Additional Considerations

While sole proprietorships are the least complicated form of business, they have some significant drawbacks in addition to determining what happens to the business when the sole proprietor dies. Sole proprietorships often have difficulty raising capital from outside sources and the interest in the business is not transferable. Before choosing to operate as a sole proprietorship, readers are strongly advised to seek legal counsel.

So, from the above information, it is concluded that there is a written agreement for continuity of business after the death of the proprietor by taking over and close all the registrations in the name of deceased person and Start fresh registrations with your name for diferrent tax departments till the implementation of GST.