{"id":180063,"date":"2023-03-17T05:34:52","date_gmt":"2023-03-17T05:34:52","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=180063"},"modified":"2023-04-30T22:18:14","modified_gmt":"2023-04-30T21:18:14","slug":"company-after-you-die","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/business-structures\/company-after-you-die\/","title":{"rendered":"What Happens to Your UK Company After You Die?"},"content":{"rendered":"

It is an unfortunate reality that owners of every UK company will eventually pass away. The impact of a business owner\u2019s death differs depending on the type of <\/span>business structure<\/span><\/a> left behind. In this article, we will discuss a number of types of businesses and how your passing will impact the business.<\/span><\/p>\n

Sole Trader<\/span><\/h2>\n

Family members often assume the business will be able to continue running relatively easily after the owner passes away. However, a business run by a sole trader dies at the same time as its owner. The business assets form part of the deceased\u2019s estate and will be dealt with either by a will or rules of intestacy.\u00a0<\/span><\/p>\n

As a sole trader, you can leave the business in your will as a gift to family members upon your death. If you are considering this as an option, you should seek specialist legal advice on <\/span>succession planning<\/span><\/a>.<\/span><\/p>\n

If a sole trader business owner dies, their business bank accounts will freeze once the bank becomes aware of the sole trader\u2019s death. This can be an issue if there are employees or creditors that require payment. Executors will not usually be able to access these accounts until probate is granted and inheritance tax matters are dealt with.<\/span><\/p>\n

Limited Company<\/span><\/h2>\n

A limited company has its own legal personality and, therefore, its existence is separate from its shareholders. If you are a company shareholder, whether that be a majority shareholder or minority shareholder, your shares will be transferred in line with inheritance law. Your shares will pass to a personal representative who will act as the executor of your will if you have one.<\/span><\/p>\n

If you are a director and there are other directors when you pass, they can appoint another director in your place. If, however, you are the sole director, there would be an issue as a private company must have at least one director who is a natural person. In this situation, the remaining shareholders can request the appointment of a new director.<\/span><\/p>\n

Importantly, if you structure your business as a limited company, it can continue to function after you pass away. Limited companies in the UK have a memorandum and <\/span>articles of association<\/span><\/a> that include important terms on how the company should function. It is a good idea to include details within the company\u2019s articles of what should happen in the circumstance of your passing, to allow the company to continue to operate as seamlessly as possible.<\/span><\/p>\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n

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