A business owner who was the sole director of his company passed away suddenly and without a Will, leaving his business without anyone to manage it. His family were left to wind up the business, but had not been directly involved in its running so found this a stressful and difficult task. If the business owner had left a Will, he could have included instructions for how his business was to be managed after his death.
Many people have not thought about what happens to their business when they die. Succession planning is an integral part of running a business of any size, but is often over-looked. It is particularly important for people who have a small business, such as sole traders or companies with only one or two directors.
One of the best ways to plan for what happens to your business after you die is in your Will. You should consider whether you want your business to continue when you are gone, or whether you would want the business to be wound up, and if so what is to happen to the assets of the business. You could even set out wishes in your Will about who you want to help your executor with winding up of the business.
If you want your business to continue when you are gone, you will need to think about who will take over running your business, especially if you are a sole trader or the only director. This could include documents to sit alongside your Will outlining your plans for the business and the direction you hope it will take in the future. Although these would not be binding, they could help with the administration of your estate.
It is important to remember that you cannot leave your role as director to someone else in your Will. However your Will can and should provide for the transfer of your company shares to an appropriate person, as they will become involved in the administration of the business. If the business has a Shareholder Agreement in place, any wishes in your Will should be consistent.
If you are a business owner and have not thought about providing for your business in a Will, you should see your lawyer or legal advisor and get a Will in place as soon as possible.