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Change business name to heirs

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1 Change business name to heirs on Tue Jan 06, 2015 5:44 pm

ginaq


Arresto Menor
My father died last April 2014. In his last will and testament, he distributed his business to me and my 2 other siblings. This year, we have to renew the Mayor's Permit. The problem is, my father passed away so they asked us to change the business name. My father's sister, who is managing the will and papers, asked me to whom among us 3 siblings shall she rename the business and is it possible to turn it from sole proprietorship to corporation since we are 3 in this business? What are the disadvantages of a corporation? Please advice us. Thank you.

P.S.: my mom and dad are separated. She is not included in the Will and testament.

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2 Re: Change business name to heirs on Tue Jan 06, 2015 10:54 pm

centro


Reclusion Perpetua
There are actually 3 forms of business organizations; a sole proprietorship, partnership and corporation. Partnership and corporation are SEC registered. There are at least 2 in partnership. Corporation requires at least 5 incorporators. Depending on the type of business, each form has its own applicability. (You did not mention your business). As corporation is guided by the SEC, it needs formal documentation and compliance not done in sole proprietorship. It has a unique taxation which is fixed w/c may or may not be to your advantage. Business registration is generally more expensive. Programs require a consensus. Paid up capital is higher. It requires corporate savvy. Yun lang po ang top of mind.

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3 Re: Change business name to heirs on Mon Feb 02, 2015 6:38 am

ginaq


Arresto Menor
Thank you for the advice. They changed it to my Older brother's name, sole proprietorship, without me knowing. What are the implications of this? Wala na akong habol diba? We are running a Hotel.

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4 Re: Change business name to heirs on Mon Feb 02, 2015 7:52 am

centro


Reclusion Perpetua
It means that the business is his in the eyes of the law, the BIR.  He gets the revenue, declares it in his income tax and is personally liable for the claims related to the business.
If however he decides to terminate the sole proprietorship of the hotel and converts it to partnership, he can still do so but it means closing the sole proprietorship, declaring it to the BIR and applies for a new one taking in partners.
Why you were not consulted and is contested is a situation that can eventually be filed in court.  There are other considerations like will and testament.

By the way, I assume that the requirements to turn over the business from one owner to the other with various government offices (e.g. DTI, barangay, DOLE, SSS, Philhealth, BIR) were properly accomplished.

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