The legal position on the death of a business owner will depend on the type of business entity. We can help, contact us today
When a sole trader dies, their business dies with them, legally speaking. The business’s assets will form part of the sole owner’s estate and pass on to benficiaries under the terms of their will.
A partnership is a business owned by at least two people. Unless there is some speciﬁc provision in the partnership agreement (and very many partnerships have no formal agreement), a partnership ceases when a partner dies.
Companies continue after a shareholder’s death, but the basic succession issues are similar to those facing a partnership. The key is to ensure the shares end up with the surviving shareholders and the deceased shareholder’s family receives some money.
If a business owner suffers critical illness such as a heart attack or cancer, it may not be possible to continue in the business, either temporarily or permanently. Good planning can ensure that, should this disaster strike, the needs of the sick business owner, their family, business partners and co-shareholders can all be protected.
Business succession planning is about taking the opportunity – well in advance of such an event happening – to plan can help crystallise what you want to happen to your business after your death, and to identify how best to ensure that this will actually come about.