A sole proprietorship is tied directly to one person aka the owner. So when that person wants to pass the business to someone else, it can’t just be simply handed over. The business would technically end when the owner steps down and retires. But before retiring, the owner may restructure the business and create a partnership, LLC, corperation that would in turn transfer the business, assets, and operations to another person. So it can be just directly given to the son or next prioretor just then in there, it is instead a whole process to pass on the company.
If a father owns a sole proprietorship and wants his two sons to continue the business, he would need to restructure it since a sole proprietorship cannot be transferred to others. One option would be to close the sole proprietorship and create a new business entity where both sons share ownership. Turning it into a partnership would allow them to split responsibilities and operate the company together. Another path would be to establish an LLC or corporation. This would mean registering a new company, outlining each son’s ownership and role, and transferring all the original assets into the new entity. Choosing an LLC could be especially helpful because it offers stronger legal protection and gives the business more flexibility to grow in the future. The father could also pass the business on by gifting or selling its assets to his sons, allowing them to form their own company under a new name or keep the existing one. This approach keeps the family legacy going while giving the next generation more control. Would you say it is better to keep the transition simple with a partnership, or would forming an LLC give the sons a stronger foundation for the future?
