Answer Book question
A sole proprietorship legally ends with the proprietor. The assets and liabilities pass to the heirs. If the family wants to continue, someone must register a new proprietorship (or another entity), obtain new GST and licences, transfer the bank relationship and renegotiate loans. Creditors and employees must be dealt with in the meantime. Speed matters; customers leave.
A sole proprietorship legally ends with the proprietor. The assets and liabilities pass to the heirs. If the family wants to continue, someone must register a new proprietorship (or another entity), obtain new GST and licences, transfer the bank relationship and renegotiate loans. Creditors and employees must be dealt with in the meantime. Speed matters; customers leave.
A hardware shop owner dies. The son keeps trading under the old GST number for four months. The bank freezes the current account; the GST department issues notices. A new registration in month one would have avoided all of it.
Proprietorship has no separate legal existence. Loans are personal debts of the estate; secured loans attach to the assets. Partnerships and companies have different continuity rules.
Entity type Bank accounts and loans GST and licences Employees and dues Stock, receivables and payables Who will run it
Continuing under the deceased's registrations.
Kerala Rising's business service can help with the re-registration sequence; a CA handles the tax closure.
New GST in week 3, bank account in week 4, loan novated in month 3. Business survives.
If nobody can run it, an orderly closure and sale of assets protects the heirs from liabilities.
Decide continue or close within two weeks Register the new entity immediately if continuing Inform the bank and creditors
Should I become a proprietorship, LLP or company? Should a business owner have more life insurance?
Start or grow a business · Family support
RBI guidance on deceased depositors' claims and UDGAM portal · SEBI/AMFI transmission procedures · IRDAI claim guidelines · Kerala Registration and Revenue Department procedures for legal heirship · Indian Succession Act / Hindu Succession Act as applicable Rates, limits and whether you may qualify change. Confirm with the official source. Ask Kerala Rising: Start with a Family Asset Inventory. Send us what you know so far. even a name and a bank. and we will help you work through every place worth checking. WhatsApp +1 443 595 9000 · keralarising.com Kerala Rising › Family › After a death · After a death 24
This page is general orientation, not personal insurance, investment, medical, legal, lending, tax, or professional advice. Rules, rates, benefits, and claim or application decisions can change. Confirm the current position with the named official source and use a licensed or qualified professional where your situation requires one. Kerala Rising does not decide whether you may qualify, approve claims, or promise an outcome.