Why every business owner should have an up-to-date Will.
The Will making process can be a daunting one – it is always something that can be put off to another day. However, for business owners, making a Will should be as important as putting in place adequate business insurance. Quite often, business owners are so busy developing and running their business they do not consider what will happen to the business if they are not there.
This was highlighted recently when the Executors of Russell Price, a successful businessman, had to make an emergency application to the Court. Unfortunately, Mr Price had not considered his business succession when preparing his Will and the Company’s articles of association did not allow the Executors to appoint a replacement director. Mr Price was the sole shareholder and director of his farming contract company and on his death there was therefore no successor to sign cheques, enter into contracts and pay the staff. The Company bank account had been frozen and the Executors could not delay dealing with the running of the business until the grant of probate was granted. The Executors made an emergency application to the Court to be appointed the shareholders in Mr Price’s place on the Company’s register, which would then enable them to vote and appoint the necessary replacement director to run the business. Having to go through this process inevitably caused some disruption to the business and if they had not been appointed then the business (which was successful) could have ceased trading. Judge Matthews sitting in the High court, when granting the application, also required the Executors to give an undertaking to obtain the Grant of Probate at the earliest opportunity and pay all necessary inheritance tax – from their own resources if required. None of which would have been necessary if the preparation of Mr Price’s Will and the business succession had been dealt with appropriately and ensured that the Company’s Articles of Association had included the necessary provisions authorising his Executors.
As well as dealing with this important issue, there are also other provisions you can consider in your Will for your business. You may wish to appoint different Executors to deal with different aspects of your estate. You could, for example, appoint friends and family as Executors of your personal estate and special Executors such as business colleagues to act in relation to your business. Depending on your business, you may also include specific provision for your Executors to run your business, thus avoiding any potential losses or unnecessary applications to court. Another key feature of succession planning for business owners are lasting powers of attorney which will enable you to appoint attorneys to manage your business if you lose capacity during your lifetime. As a business owner you may not want to have the same attorneys managing both your personal affairs and your business affairs. It is possible to make separate powers of attorney appointing “business” attorneys and “personal” attorneys; however the provisions need to be very specific to ensure that these meet with your wishes and enable the business to be run effectively.
We would always recommend that you keep your Will under constant review to ensure that it is relevant and meets your needs. We also work closely with our Corporate team to ensure that your wishes in your Will are in accordance with the your business arrangements.
Speak to our Wills specialists today.
If you are a business owner and you would like advice on succession planning for your business please contact one of our specialist private client team at email@example.com or on 03456381381.
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