Navigating Employee Transfers and PF Continuation After a Sole Proprietor's Passing

Employee Transfer and PF Continuation After Sole Proprietor's Death

This is regarding the death of a Sole Proprietor who had 5-6 employees under him. The Sole Proprietor had 7-8 companies running simultaneously and was one of the Directors in all those companies. After the death of the Sole Proprietor, can those 5-6 employees be transferred to any of those companies, and can their PF be continued in the same manner?

Rules for Employee Transfer and Payroll Appointment

In this case, what are the rules regarding the transfer of employees, and can they be appointed to the company's payroll immediately after the death of the Sole Proprietor?

Status of Provident Fund (PF) Transfer

What will be the status of PF if they want to transfer it to the new company? Please provide all relevant feedback in accordance with the law.

Clarification on Business Structure

It seems there might be some confusion regarding the business structure. A sole proprietor typically owns and operates a single business entity. However, you mentioned that the individual is a director in multiple companies, which suggests a different business arrangement.

If the individual is indeed a director in multiple companies, it would imply a corporate structure rather than a sole proprietorship. This distinction is important when considering the transfer of employees and the continuation of their Provident Fund (PF).

Regards,

Clarification on Employee Transfer and PF Continuation

Dear Anonymous,

A Sole Proprietor has 7-8 companies running simultaneously, and he is one of the Directors in all those companies. I think you are making a conceptual mistake. You are saying "Sole Proprietor" and at the same time you say he is one of the Directors.

Thanks.

He had a proprietor business, and simultaneously, he had a few companies with maximum shareholding where he was the Director. 5-6 employees were working at his residence for 10-15 years, and he was paying them from his Sole Proprietor business. PF was deducted and deposited on their behalf. After his death, we want to transfer those employees to the company's payroll so that they can continue their service, and their PF can be transferred.

Since the process of transferring his legal heir, etc., will take time after his death, those 5-6 employees are being taken into the company's payroll, where his daughter has been appointed as a Director of those companies. Since putting those 5-6 employees out of work is not correct, we want to absorb them into our various companies.

Is it possible to transfer them to our company's payroll and have their PF simultaneously transferred?

Regards.

If the companies desire to induct those employees, the company can. This will be good ethics on the part of the company. As far as the transfer of PF is concerned, that can be done by submitting Form 13 with the PF people. Though this process is online now and very convenient.

Thanks and regards,
Saurabh

Please also note that the liability of dues, such as Gratuity, Bonus (only if being paid), leave, and any other benefits for years of service, is either to be settled now (if the workers wish to do so—in such a case, the process of shifting them is different) or, on transfer, the same will automatically become the liability of the new company. In both cases, these issues are to be explained and accepted by the new company.

Regards,
Madan Salgaunker