The short answer is “Yes”. Everyone should have a Will regardless of how many or how few assets you may have. A Will ensures that in the event of your death your belongings are distributed as per your wishes.
You may have worked hard for a lot of your life as a sole company director/shareholder, however, if you do not clearly define your intentions for the future of the business upon your passing, this can cause immense emotional and even financial distress for your family, loved ones and business associates.
Ordinarily, if a director of a company dies, the surviving directors can continue to manage the company and may even make a temporary appointment, pending the appointment of a new director by the shareholders of the company. Similarly, if the sole shareholder of a company dies, the directors can continue to manage it until the beneficiaries under the Will have the shares transferred to them.
However, if a sole director or shareholder of a company should pass without a valid Will, this can leave the company with no person who is authorised to manage and operate the business.
What Can a Sole Director do to Protect the Company?
Normally a deceased cannot bequeath their directorship to someone else because directorship is an office, not property, and your Will can only deal with your property.
However, a director of a company may also be a shareholder of the same company. When a shareholder passes away their shares can go to their chosen beneficiaries under their Will. It is possible to specifically name a person or persons in the Will who is to receive shares in a company.
Alternatively, the executor (appointed by means of a valid Will) or other personal representative appointed to administer the deceased’s estate may appoint a new director to the company. The director has all the powers, rights and duties of the deceased director and can keep the company running until shares are transferred to beneficiaries who may then appoint new directors if they wish.
Whether it is a sole director/sole shareholder company or a bigger company, getting an estate plan in order (and regularly reviewing that estate plan) is essential to avoid any expensive court procedures.
If you would like to find out more about your rights and obligations, Straits Lawyers are here to help. Simply send us an email at email@example.com or give us a call on 8410 9069 to arrange an appointment for an interview.
Alternatively if you would like your Will to be drafted, Straits Lawyers are now offering online Will services. To access these services, simply click on the link – https://straits-lawyers.square.site/product/online-will-/1?cs=true
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Please note that this article does not constitute legal advice and Straits Lawyers will not be legally responsible for any actions you take based on this article.