This factsheet outlines the key features and the pros and cons of four common US business 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. <\/p>\n\n\n\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 succession planning<\/a>.<\/p>\n<\/div>\n\n\n\n It is important to note that while you can leave business assets to beneficiaries, they cannot simply continue trading under the same business name and structure. They would need to:<\/p>\n\n\n\n If a sole trader business owner dies, their business bank accounts will freeze once the bank becomes aware of the death. Executors will not usually be able to access these accounts until probate is granted and inheritance tax matters are dealt with. This can create immediate problems:<\/p>\n\n\n\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.<\/p>\n\n\n\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.<\/p>\n\n\n\n Importantly, if you structure your business as a limited company, it can continue to function after you pass away. It is a good idea to include provisions within the company’s articles of association<\/a> covering what should happen upon your death. These might include:<\/p>\n\n\n\n
\nstructures: sole traders, partnerships, limited liability companies (LLCs), and corporations.<\/p>\n <\/div>\n \n\nDownload Now<\/a> <\/section>\n <\/div>\n\n\n\n\nSole Trader<\/h2>\n\n\n\n
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Limited Company<\/h2>\n\n\n\n
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\n Expanding to the USA: Understanding Business Structures<\/div>\n
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