As a director or shareholder of a Limited Company or LLP, knowing that one day your company will be without you is a situation that must be planned for.
Whether it’s as a consequence of being bought out, retiring, going part-time, or allowing your successor to take up the reigns, working on these situations today can save time, money and trouble in the future.
Similarly, there will come a day where you need to consider what happens to your company when you’re gone for good, so let’s explore.
First things first, in the event that a shareholder of a company were to pass away without a Will, their assets will be handled in accordance with what are known as intestacy rules, which we have explored further in this article.
We cannot recommend you allow this to happen, as Intestacy will empower the government to make decisions about where all of your assets go, leaving your loved ones at the behest of their decisions, and not yours.
If you are aware that you could be in this situation, then contact us today about having your affairs put in order.
However, if this is you, you may find that your business is impervious to this, as a read over your existing Partnership Agreement or Shareholder Agreement may illuminate clauses of what happens in the event of a shareholders death, and will take precedent of what happens to your shares and responsibilities should you pass away.
If you take a read of these documents, and find that they fail to fit with your own wishes, consider redrafting them with your other shareholders.
As a standard rule, these clauses will often dictate that in the event of one shareholders death, the other(s) will inherit those shares, or have an option to purchase them from the deceased’s estate . However, this does not always need to be the case, as the assumption is made that shareholders will be the best people to inherit those shares, and you may believe this is not the case.
When to speak to a solicitor
Our succession team are available for contact at any point in your journey. However, if you find there is conflict between your wishes and your other shareholders, or believe that what exists already is not in the best interests of your company, then we recommend contacting Andrew as soon as possible by clicking here, with 30 years of experience in probate dispute resolution, he is capable of supporting you.
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