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LSDefine
Simple English definitions for legal terms
carrying on business
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A quick definition of carrying on business:
Carrying on business means doing activities for a company or partnership to make money. It can also mean having a legal duty to keep running a business until everything is distributed. Sometimes, carrying on business is needed to get special tax benefits or keep the benefits of being in a partnership.
A more thorough explanation:
Definition: Carrying on business refers to performing activities for a business organization, such as a partnership or corporation, with the intention of making a profit.
This concept is used in various ways:
- A trustee may have a legal obligation to carry on the business in a trust until the assets are distributed.
- Carrying on business may be a requirement to receive certain beneficial corporate tax treatment.
- In partnership law, partners must carry on business to maintain the property benefits of the partnership structure.
For example, if a trustee is responsible for managing a trust that includes a business, they must continue to operate the business until the trust's assets are distributed to the beneficiaries. Similarly, if a corporation wants to take advantage of certain tax benefits, it must demonstrate that it is carrying on business in a particular jurisdiction. Finally, if partners in a partnership stop carrying on business, they may lose the benefits of the partnership structure, such as shared ownership of property.