Death of a limited company contractor

Payment owed

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One of our contractors passed away suddenly and is owed a days pay. He traded as a limited company and was the sole director and shareholder. His son has asked us to pay into another bank account as the limited account has been frozen. I've said I can't do this, has anyone come across this? What do I do, just hold the money as a creditor?

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By Duggimon
27th Mar 2017 10:50

The debt is owed to the estate of your contractor. Is the son acting as executor?

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By Sandnickel
27th Mar 2017 11:23

This is the issue that I'm trying to get my head around. The debt is owed to the limited company, not the executor? The shares will be transferred to the executor but that doesn't mean that the debts owed can go directly to the son?

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By Duggimon
27th Mar 2017 11:47

Sorry, yes, I didn't say what I meant. The debt remains owed to the company, the company forms part of the estate. The son, acting as executor, needs to get the company in order first, then you can pay the debt.

I would not, in your position, pay the debt directly to the son, at least not until he is in some official capacity acting for the company, ie appointed as a director. This will be necessary anyway if he is to either carry on the company or wind it up.

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By Sandnickel
27th Mar 2017 12:45

Thanks Duggimon, this was my line of thought.

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By Tim Vane
27th Mar 2017 15:30

If it were me I would pay the money directly to the limited company right away, as per normal. You can then finalise matters at your end and leave the son to worry about getting the money out of the company.

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By SteveHa
27th Mar 2017 16:30

Surely the executors can, as long as they control the shares, appoint a new director who can then have the account unfrozen.

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