Can a sole proprietor who is running a business for the last 10-15 years and wants to discontinue the business in his name, transfer it as a running concern to one of his relatives and can the other person carry on the business in its present form (all other assets and liabilities remaining the same, just change of Sole proprietor) and what are the income tax implications (No VAT/Sales tax involved as the nature of goods sold are not covered by VAT or Sales tax)
You can transfer the the business concern to one of your relatives. After transfer it is necessary to inform the change to the sales tax dept. in a prescribed form. It is not necessary to apply for the fresh VAT because business is transferred to the relative.
You can either sale the buisness or do the partnership dissolution method. Otherwise you can not tranfer it in any other manner., may be even to your closest of close relative.
Contrary to the above opinion you have to inform the sales tax / VAT and Income tax dept about the changes, since apart from other things all notices and actions will continue against you. Similarly all civil and criminal action by third parties will also be against you only ; even though you have departed.
Sole means one person. So a sole trading business carried by one person. The person who conducts the business is called 'sole trader or sole proprietor'.
A sole proprietorship also known as a sole trader, or simply proprietorship is a type of business entity which is owned and run by one individual and where there is no legal distinction between the owner and the business. All profits and all losses accrue to the owner (subject to taxation specific to the business). All assets of the business are owned by the proprietor and all debts of the business are the proprietors'. This means that the owner has no lesser liability than if he was acting as individual instead of a business.
you cannot sell or transfer the sole Prop. buiness
you have to close the Bank A/c as you cannot change the name of properitor in the existing account