When you have invested a significant amount of time and effort into a company over the course of many years, it is imperative that the company continue to be successful and lucrative so that you can protect the financial interests of your loved ones.
When it comes to the distribution of your estate, careful forethought and planning ahead are required in order to guarantee that your assets are given to the appropriate heirs. Likewise, giving serious thought to the question of what will become of your company in the years to come is also essential.
Why bother making plans in advance?
If you are the owner of a firm, it is of the utmost importance to put in writing who you would like to inherit your inheritance. Without a will, your business and shares might be handed over to someone who does not possess the essential abilities to operate it in a profitable manner, and there could be conflict among interested parties, who could differ about how it should be administered.
To guarantee that your estate is able to benefit from any relevant tax relief and exemptions, it is imperative that you carry out thorough succession planning in order to secure the continued survival of your company.
Because business succession law may be a challenging and intricate area of the law, you will need legal counsel from an attorney who possesses the necessary degree of experience and specialisation to guide you through the process. Our recommendations will take the following into account:
If you choose to pass on an amount of money that is equivalent to the worth of your business rather than the actual business itself or its shares, you can do so.
if there is a legal partnership agreement between the two of you.
In the event that you require the preparation of a formal partnership agreement.
We will provide you with the piece of mind that your company and the financial futures of your loved ones are protected by putting in place a solid framework that will contain your will, a life assurance policy, and any other documents that is pertinent to the situation.
Planning for the continuation of a business
Because the personal circumstances of each person are unique, we will work closely with you to develop an individualised strategy that meets the needs of you, your organisation, and the people who will benefit from it.
All aspects of estate preparation, including guidance on succession planning, are included in the scope of our services.
Whether you operate your company as a family concern or maintain a completely distinct entity from it, the way you prepare for its future will be heavily influenced by which of these two scenarios you choose. A conflict between beneficiaries in the future about the distribution of assets and obligations can be helped to be avoided by careful preparation done in the present. We will assist you in considering the following:
Who will take over the day-to-day operations of the company?
Should any earnings be split among the beneficiaries, or should they be invested back into the business?
How will any agreements regarding partnerships be impacted?
Should any shares be kept in trust for future generations?
If you have any interest in selling your company, please let us know.
Who among the executors would be qualified to conduct such a transaction appropriately and effectively?
We are able to assist you with the orderly transfer of your family business to the subsequent generation, so minimising the likelihood of any family disputes arising throughout the process and guaranteeing that your enterprise maintains its lucrative and successful status.
Will Drafting for Entrepreneurs and Business Owners
Without a will, the formal partition of your assets, including any business interests, won’t take your preferences into account. As a result, it’s possible that many thousands of pounds in inheritance tax may be paid even though it might have been avoided. We are able to assist you in the process of preparing and writing your will so that it is tailored to your unique circumstances and objectives. We are proud of the tight ties we have with our customers and will work hard to ensure that we have a complete understanding of your company, your objectives, and the expectations of everyone involved.
Help with tax relief applications and guidance
There are a variety of inheritance tax reliefs and exemptions that are available to you as a business owner. You and your loved ones may be eligible for tax relief of up to fifty percent or even one hundred percent on specific business assets, regardless of whether they are passed on during your lifetime or left in your will. Because of our extensive experience and specialised knowledge, we are able to provide complete guidance on any and all tax-related issues.
What takes place in the event that a majority shareholder passes away?
If a majority shareholder passes away without leaving a valid will, it is possible that their shares may be inherited by a spouse who has never been actively involved in the day-to-day operations of any firm, let alone the management of the family’s savings. Even worse, the shares may wind up being held in an inflexible trust for the benefit of younger children.
Some owners of businesses need to be reminded of the repercussions that a death may have on their companies at all levels, including the impact that it can have when a key employee dies away.
The repercussions for businesses run by a single Director
“If a single Director passes away, there are repercussions for the business bank account; it will be locked, which means that cashflow will be hampered, and contracts will be negatively impacted as credit would dry up.” The owners of businesses need to be aware of these vulnerabilities in order to ensure the proper operation of their companies, says Sarah.
Wills for sole proprietorships and businesses
It’s possible that a lone proprietor is aware that their company will close after they pass away, however as Sarah points out:
“How helpful it was to receive a reminder from a reliable expert adviser to leave guidance and notes for loved ones who would ultimately be faced with selling on goods, fixtures, fittings, and any buildings the lone trader owned and utilised,” said the person.
Because there are restrictions on what may be done before probate is granted, some types of companies run the risk of being exposed throughout the process of administering an estate. This is because there are limitations on what can be done. If you, as the owner of a company, have neglected to make contingency plans for important individuals not being around, including yourself, you are storing up future issues for the members of your family who are still living at a time when they are going through a tremendous deal of emotional turmoil.
Sarah adds, “The good news is that the end of your business does not have to be the end of your business, and it is actually easier to make a Will than the majority of people realise.”
Your solicitor will remind you to consider who will inherit your shares or business interest when you are making your business will, as well as whether or not there may be more effective ways to pass on the value of the business in the event that the inheritor does not wish to continue running the company. If you die without a will, the administrators of your estate will divide it up according to the laws of intestacy, which give priority to the people who are related to you by blood. What happens if your partner in shared living helps you manage your business, but your kids have little interest in it? Your children would be in charge of everything if there was no will and your cohabitant would have no voice in the matter. This might harm their connection at a time when they need to pull together, or it could even result in mismanagement, disagreements about the future direction of the company, and eventually a decrease in the value of the legacy your company has left behind.
Sarah, who has experience in the design of business wills, provides advice regarding the choices for passing on your company shares or your stake in a partnership, the specifics of which rely on the Company Articles of Association or the partnership agreement for the company in question (if there is one). There may be a valid shareholders’ agreement that has an effect on how the Shares pass (there may be restrictions on who can be offered shares after a death, for example), and this document needs to be read and understood in the round, in light of the Company’s Memorandum and Articles of Association, so that the practical effect of the documents is clearly understood by the business owners. If there is a valid shareholders’ agreement that has an effect on how the Shares pass, then the Shares will pass in accordance The expert who is creating your will has to be familiar with all of the documents pertaining to your company (or partnership), as the terms of your will and those of the business (or partnership) cannot be in direct opposition to one another. A specialist business will lawyers is going to be aware of this, and they are going to counsel you appropriately.
“For some of my customers, I’ve been able to modify the articles of association so that they may transfer their shares to specific members of their family or to certain coworkers, or into a tax-efficient trust that is administered by qualified individuals. Wills4less FAQs
How to shield both your company and your loved ones from harm.
You can safeguard both your family and your company by ensuring that you have an up-to-date will as well as a power of attorney that is durable.
When you own a company, it is imperative that you not only think about your own demise but also the state of your own health.
“It is important to take into account your state of health, as well as your capacity, which is an issue that sadly can arise at any time for everyone. “As a business owner, it is important to make sure that the operation of your business is not adversely affected if you are taken ill or injured, and of course, the easiest way to achieve this is to make a Commercial Lasting Power of Attorney (LPA),” she says. “It is important to make sure that the operation of your business is not adversely affected if you are taken ill or injured.”
If you have this in place, you may be certain that certain business processes will be able to continue while you get back on your feet. At shareholder meetings, your selected attorney will be given the opportunity to cast a vote. You may also check to see if you have safeguarded against a loss of capability the payment of salaries, the signing of checks, and the entering into of contracts. If you do not make preparations for incapacity, the results for your company might be catastrophic, since there may not be anybody who is legally qualified to handle the organisation in your absence. If this happens, your only choice may be to submit an application to the Court of Protection in order to get management power over the company; nevertheless, such procedures are time consuming and costly.
Making a limited liability protection agreement (LPA) is just another tool to safeguard your company, and just like other types of insurance, it is quite useful.
What better time of year is there to make the key decisions that will affect the future financial stability of your family?”