Avoid ending up with an unexpected business partner!
- AuthorTracey Dickens
Our Commercial & Corporate Finance Team has seen an increase in new clients experiencing difficulties following the death of a shareholder, whereby the deceased’s shares are being passed to their relatives.
Business owners have been seeking our advice when arrangements are not proceeding as they had expected and they find themselves working with their business partner’s relative(s). There is a lack of appreciation that once a person owns shares, without provisions in the Articles of Association or a Shareholders’ Agreement, those shares will remain with a shareholder and can be passed to their estate, and therefore their beneficiaries, upon death.
We always encourage owners of companies to address this and plan for succession, rather than have it forced upon them. This also enables all of the shareholders to think about succession planning generally, in connection with retirement, ill health or in the worst case scenario, the death of a key person within the company.
It really does prove to be time well spent - I am based at our Colchester office and can be reached on 01206 217326 or firstname.lastname@example.org.