My cousin brother and I had a partnership business (movie theater) that we inherited from our respective fathers. Currently we had 4 partners - me, my wife, my cousin brother and his wife. The women has 5% each where as me and my brother has 45% each. We both were designated as managing partners. The business was running with a proper partnership deed until the sudden death of my brother.
An year ago my brother died of ill-health and since then while I am running the business I am not sure what are the tax implications of running the business. I heard the partnership ceases to exist automatically after the death of a partner. Currently I am running the business with out any legal framework for the business.
My questions are:
1. Is it mandatory that we form a new partnership with the existing partners? If not, what are the legal implications.
2. How should I share the profits from the business? What happens to the share of my brother? Can that be given to his wife or is there any other legal procedure for his share?
3. Can I just add the profits to my personal income for tax purposes as there is no business entity (post the death of a partner) ?
4. Are there any other legal obligations that may have fulfill in the above case of a broken partnership?
I appreciate if you can guide me with the above. I have no knowledge of these matters as it can all taken care by my late brother (who was 10 years elder to me)
Regards
Amar.
