What happens to my Business in the Will?

Running a business is not an easy task and it may be one of your most valuable asset. It is therefore important to know what happens to your business when you pass away. The following is information in relation to your business in our online Will:-

What happens to my company when I die?

Sole proprietor

As a sole proprietor, the assets that you have in your company are owned by you.

In our online Will, your company would simply form part of your residuary estate. It will then be shared amongst the beneficiaries that you have included in the distribution of your Will.

If you would like to give away your company as a specific gift, then you should consider using our premium service.

Limited liability company

As a limited liability company, you will have an articles of association and may have other related agreements agreed between the shareholders. These contracts may specify what happens to your share of the company when you die, so it is important to review these documents.

If these documents describe what happens to your share when you die, then this would normally overrule whatever is written in the Will.

If there are no details on what happens to a deceased shareholder, then you should discuss this with the other shareholders on how you would like to make the arrangements i.e. amend the document or write an agreement i.e. cross option agreement. If no agreement is made, then your shares would form part of your residuary estate and follow the distribution in your Will.

If you own a limited liability company as a sole shareholder and director, you can also consider appointing a reserve director. A reserve director will act as a sole director for the company when you pass away, to arrange to close down the business or until such time another person is appointed as director. During this period, the reserve director has the full power and responsibility as a sole director.

If you would like to give away any shares of your company as a specific gift, then you should choose our premium service.

Partnership

If you own a partnership, then you may have formed a partnership agreement. This agreement may describe what happens to your share when you pass away. The terms would override whatever is written in your Will. If you did not create a partnership agreement or any other contract, then the partnership may have to be shut down and your share of the partnership will be included as part of your residuary estate.

Similar to a sole proprietor, a partnership has no separate legal entity.

Where do I include my business in my estate plan?

It is important for your executors to know that you are running a business.

You can easily add details of your business in our List of Assets. By including the company’s name and other details, your executors would be able to manage and deal with your business in a smooth and efficient manner.