We are the family of four. Father, Mother, Son and Daughter. My father having a sole proprietor business of hospitality services which includes land. The land is divided between my father (85%) and mother(15%). Now me as a son want to get the full hold in the business after him without any interruption of my mother and sister. I also want a legal documents which restricts my sister and mother to come and participate in the business and its activities starting today. Please help!
The land is purchased by my father i.e. not inherited. Trying to get all this done without my sister's notice. It will be fine if only my father share comes under my control with the business administration rights.
your father can execute will bequeathing land and business run on said land to you
2) will should be attested by 2 witnesses
3) in alternative the proprietorship firm can be transferred by transfer of ownership of assets of the firm. your father can execute sale deed in this regard
4) the licence can be transferred in your name on execution of sale deed
act as mentioned herein above
- Since, your father has major share in the the said property , hence he can allow you use the same without getting consent of your sisters
- Further, as the said business is also under the sole proprietorship of your father and not partnership, then the said business can be run and transfer to you by your father and your sisters consent is not needed.
- Your father can execute an assignment deed for getting the same transfer in your name.
Sale deed will come with lot of stamp duty. please suggest any other option other than that. and for the will, it can be easily altered if my father wishes to. I want a solution which cannot be altered.
There is no other way than the will to save stamp duty
- Your father can register a gift deed in your favor
- The stamp duty is nominal in the case of blood relation.
For the gift deed, there's something 5% stamp duty on the govt announced value of the land. the 5% is too much to pay as a stamp duty. Is there is any other way to get the gift deed with very nominal duty?
- In Madhya Pradesh, the stamp duty for a gift deed between blood relatives is typically 1% of the property's market value up to Rs. 1,000.
- For non-family members, the stamp duty is 5%. Additionally, a 3% registration charge is levied regardless of the relationship.
In the first clause, does that mean if the property is 1000 sq.ft and Price per Sq.ft is 1000. total value is 1000000. the stamp duty will be 1% that is Rs 10000?
Sale deed is best option
better to pay stamp duty and registration charges
in alternative go for will
You have to pay stamp duty and registration charges
Local lawyer can guide you as to stamp duty in your state
All deeds other than will attract high stamp duty and registration
To transfer a sole proprietorship business from a father to his son, the father can either execute a gift deed or quit claim deed transferring the ownership of the business assets to his son.
The assets should be listed in the deed to avoid future confusion.
Alternatively, the proprietorship can be converted into a partnership, with the son becoming a partner and the father resigning from the partnership.
However the land on which the business establishment is functioning is jointly owned by father and mother, in that case mother has to execute a gift deed insofar as her share in the land is concerned, the gift deed can be executed jointly by father and mother in your favor to make you an absolute owner of the land too.
A quit claim registered deed transfers the father's interest in the business to his son, also without consideration.
Your father can transfer only his share and interests in your favor if your mother is not cooperating to transfer her 15% share in the property to your name.
The sale deed as well as the Will are not the proper option in the given circumstance.
The next options before you is that your father executes a registered gift deed or a quit claim deed in your favor to make the transfer effective and with immediate forthwith from the date of its execution, it cannot be challenged by your sister since yor father has transferred on his own without any force or pressure and he was in a good mental health condition.
If you want to legally get the business and the property transferred to your name then you may have to bear the stamp duty and the registration charges only then it cannot be challenged.
Any option of getting an unregistered gift deed is not legally valid and it will not be considered as a proper transfer especially when your sister decides to file a suit for partition after the lifetime of your father.
If you want to avoid litigation and huge expenses towards litigation in futurem, you may better be ready to pay the stamp duty and acquire the proeprty in a legally recognised manner.
The stamp duty is the state subject and may vary from one state to another across the country.
Therefore you may enquire the applicable stamp duty for the transaction that you may decide upon from the concerned sub registrar office.
- No, you have to pay only 1000
Dear Client, kindly note the following points,
As the land is bought by your father (not ancestral), it is his self-acquired property. Your mother's share of 15% implies some manner of joint ownership or gift, which needs to be established by papers.
Your father can give away his 85% share in the business and land to you through sale deed, gift deed, or a family settlement. Since you do not wish your mother and sister to participate in business, the transfer should explicitly mention business management rights and exclusion provisions. But your mother's 15% share cannot be left out unless she consents or you purchase her share independently.
You can execute a family settlement agreement or a business agreement by all concerned restricting their participation. Without their agreement, you can't unilaterally exclude them if they are owners. If the business is a sole proprietorship in your dad's name, he can designate you as the sole manager and limit others from participation by internal resolution.
Stamp duty on gift deeds usually is 5% of market value, which is high. Sale deed invites more stamp duty but conveys absolute ownership. Family settlement or partition deed may be an option but needs consent from all parties. No legal bypass is available to escape stamp duty legally. Will can be changed at any time by your father and does not convey ownership until demise. To acquire irrevocable control, your father has to transfer ownership now through sale or gift deed. Else, draft a trust deed in which your father hands over business assets to a trust with you as the beneficiary, but it also involves stamp duty and legal formalities.
Suppose property is 1000 sq.ft at Rs.1000/sq.ft, value = Rs.10,00,000. Stamp duty on gift deed = 5% of Rs.10,00,000 = Rs.50,000 (approx.). Sale deed stamp duty differs from state to state but generally higher than gift deed.
Gift Deed (Father to Son) – To transfer only father's 85% land + business rights:
Yes, stamp duty ~5% on govt. value applies in MP.
No legal way to avoid stamp duty entirely unless under family settlement (see below).
Family Settlement Deed (Low/No Stamp Duty) –
All family members agree father’s share + business goes to you.
Requires signature of mother & sister, so not secret.
Minimal stamp duty if no monetary consideration.
Power of Attorney (POA) –
Father can give you POA to manage the business and land.
POA is revocable anytime by father, not permanent.
Will –
Cheapest now, but can be changed anytime.
Useful only after father’s death.
No way to legally block your mother/sister now if they co-own or your father is alive and unwilling to permanently transfer his share.
