Death of a small business proprietor.

Posted: November 6, 2013 in Family Businesses
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As gruesome as the topic seems, it is a contingency for which a succession/estate plan must be made.  The death of a proprietor means that the proprietorship is over. The T2125 return must be prepared up to the date of death and this is filed in accordance with the rules for filing a deceased person’s return:

  • 6 months after the date of death or April 30th (of the following year) whichever is sooner.

This return is called a “terminal return” and a copy of the last will and testament of the testator (the deceased) must accompany the T1 return along with a copy of the death certificate (provided by the funeral home).

It is important that an experienced estate representative be appointed as the business may be closed as at the date of death, there may be contracts to complete, trade receivables to collect and payables and statutory filings to make.

The assets and liabilities of the proprietor would become estate liabilities and estate assets and must be properly accounted for.

 

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