When a proprietor dies what happens to his proprietorship ?
11-Oct-2023 (In Property Law)
1. When a proprietor dies what happens to his proprietorship ? Ceases to exist ?
2. What happens to his debt, Credits and receivables ?
3. Does the debts / liability / loss / HR etc
a. Pass on fully and 100% to his legal heirs ?
b. It is limited to the amount that the estate can pay ?
c. If estate pays out 100% and estate is now over and there are still debtors what happens to those debts. ?
d. However if a proprietorship converts to a partnership / private limited and the legal heirs wish to run the company they then take on the liability a 100% and are responsible for bad debts/losses as well. Their personal assets can come on the line ?
4. What happens if we simply close the proprietorship ?
1. When a proprietor dies what happens to his proprietorship ? Ceases to exist ?
Answer: This will depend on the agreement of the firm or any other document which has terms indicating the terms of the proprietorship;
2. What happens to his debt, Credits and receivables ?
Answer: Once he dies intestate, the same passes onto the legal heirs;
3. Does the debts / liability / loss / HR etc a. Pass on fully and 100% to his legal heirs?
Answer: Yes to the legal heirs;
b. It is limited to the amount that the estate can pay ?
Answer: This question is not complete;
c. If estate pays out 100% and estate is now over and there are still debtors what happens to those debts. ?
Answer: The debtors can go for suit for recovery or company petition and avail the debts through sale of assets of the company;
d. However if a proprietorship converts to a partnership / private limited and the legal heirs wish to run the company they then take on the liability a 100% and are responsible for bad debts/losses as well. Their personal assets can come on the line ?
Answer: Yes if it becomes partnership and is registered as one, then the other partners are legally liable for the payment of the liabilities;
4. What happens if we simply close the proprietorship ?
Answer: Then you can write off the debts and the assets can be sold off or auctioned. The legal heirs can be given some share.
Answer: This will depend on the agreement of the firm or any other document which has terms indicating the terms of the proprietorship;
2. What happens to his debt, Credits and receivables ?
Answer: Once he dies intestate, the same passes onto the legal heirs;
3. Does the debts / liability / loss / HR etc a. Pass on fully and 100% to his legal heirs?
Answer: Yes to the legal heirs;
b. It is limited to the amount that the estate can pay ?
Answer: This question is not complete;
c. If estate pays out 100% and estate is now over and there are still debtors what happens to those debts. ?
Answer: The debtors can go for suit for recovery or company petition and avail the debts through sale of assets of the company;
d. However if a proprietorship converts to a partnership / private limited and the legal heirs wish to run the company they then take on the liability a 100% and are responsible for bad debts/losses as well. Their personal assets can come on the line ?
Answer: Yes if it becomes partnership and is registered as one, then the other partners are legally liable for the payment of the liabilities;
4. What happens if we simply close the proprietorship ?
Answer: Then you can write off the debts and the assets can be sold off or auctioned. The legal heirs can be given some share.
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