As highlighted by Edward Jacobs, in the recent podcast, 'What happens to your business if you die?', it is imperative that business owners put in place provisions for after their death and here's why.
When a business owner dies, their interest does not necessarily cease to exist and it's therefore essential that thought is given to who will take control of and be responsible for making the day-to-day decisions when it comes to the business.
Some businesses are governed by written agreements and others by articles of association – prudent business owners will check these regularly to ensure they accurately reflect intentions and that the business will pass to somebody competent and with an actual interest in order to guarantee continued success in the future.
Alternatively, business owners may set out what happens to their interest in the business in their will. This may mean that the business is passed on to relatives or close friends who could end up having conflicting interests or in other cases, put into a discretionary trust.
If a business owner makes no provision at all and for example doesn't leave behind a will, the rules of intestacy will apply, and the interest could end up reverting to distant relatives with no interest or requisite skillset to assist with running the business.
*Edward featured on the Ready To Grow podcast with Rechenda Smith. You can listen to the full episode by clicking here.
If you are a business owner and want to understand what will happen to your interest in a business after death, please contact our dedicated Client Relations team on 01603 693510, or enquiries@clapham-collinge.co.uk. Our specialist Corporate and Commercial and Private Client departments will be able to advise you on what will happen to your interest after death and assist you in putting in place measures to ensure that provisions are made in accordance with your wishes.
