Probate law for many of us is often associated with claims against personal estates, issues surrounding inheritance tax or perhaps even drafting our own will. But when it comes to our business or businesses, probate law can often be overlooked and in some cases may seem irrelevant to us as business directors.
A Business Perspective
However, we mentioned back in April 2013 that there are many issues which crop up when someone who owns a business passes away; typically, firms are unable to deliver appropriate redundancy payments, in the event of a business being sold off due to insolvency, following the death of a sole proprietor; or companies need contingency plans in place to help reduce the wider impact on major stakeholders of an individual’s death. When it comes to businesses there really is a lot to consider, especially if you want to ensure that you don’t end up breaching the 2006 Companies Act.
What needs to be addressed is the extreme care that needs to be taken with a business facing probate issues. We advise individuals to seek professional legal advice from a trusted expert such as one of our team at Probaters, who have extensive knowledge. We can deal with the complexity of a business, its assets, liabilities, employees and other stakeholders.
Some areas which our team of probate experts specialise in are:
• the day-to-day running of a business that is still fully operational.
• issues surrounding tax to ensure full compliance.
• advice on any conflicts that may arise when dealing with opposing laws or international legislation
• discovering the type of business that the individual operated in
• the division of your business ahead of time to ensure that things run smoothly should the unthinkable happen.
• And navigating your way around common business probate pitfalls.
What happens to my business when I die?
Depending on the type of business that you or several individuals operate, there are several things that can happen to your business. We have provided a brief overview for you below, but it should be noted that this isn’t an exhaustive list!
• Sole traders will automatically have their business dealt with in accordance with the terms of their will or inheritance laws. Due to the nature of this type of business, liabilities are considered personal debts and therefore are tied to the individual’s home estate.
• Partnerships where more than one individual operated the business require a deed of partnership which provides an overview of each individual’s contribution to the business, sets out who is liable for what and communicates the deceased’s wishes surrounding the business and its daily operations.
• Limited Companies – Unlike the above for mentioned business types, limited companies restrict the amount of liability that can be placed on an individual, meaning that any debts or liabilities are linked solely to the business. Whilst this can provide protection to your spouse and children by ensuring that your personal estate is untouchable, it does mean that individuals who are in a joint partnership with one or more individuals become responsible for dealing with any issues surrounding insolvency and debts.
Updating the Status Quo
Whilst, the impact of a business director’s death can vary significantly from one business to another, one thing every business has to do is inform companies’ house of the death. This can be done by simply completing the TM01 (termination of a company director appointment) form which will update the directors listed for the business in question.
Major stakeholders such as customers, shareholders or suppliers may also need to be informed and updated.
Let us guide you through the tough times.
Why not give us a call today on 01273 789525 to discuss your business requirements, and talk through your options with a member of our probate team? They can provide expert advice on the latest probate and business legislation.