Share this content

Sole director and shareholder died

Company in existence but not trading, debt owing

Didn't find your answer?

Just heard a client of mine has passed away sadly. Unexpected and not old so a big shock.

Onto the matter of fact aspect, such as our profession is, he did have a limited company, it had not traded for several years, and the only thing on the last few accounts was the shareholding and a corporation tax debt which for some reason HMRC have never pursued.

Any advice on the way forward with this would be appreciatd.

Replies (20)

Please login or register to join the discussion.

RLI
By lionofludesch
20th Sep 2021 11:56

What does his will say ?

His beneficiaries now own the shares (or will do once probate has been obtained and the transfer paperwork completed) so they need to appoint a new director as soon as they are able.

Too late now for this client but a reminder that every one man company needs an alternate director at the very least.

Thanks (0)
Replying to lionofludesch:
avatar
By AdamMurphy
20th Sep 2021 12:00

Nothing in the will about the company/shares.........

Thanks (0)
Replying to AdamMurphy:
avatar
By David Ex
20th Sep 2021 12:08

AdamMurphy wrote:

Nothing in the will about the company/shares.........

The will presumably deals with his residual estate and that would include any assets not specifically bequeathed.

Unless the law has changed since I was training.

Thanks (1)
Replying to David Ex:
avatar
By Paul Crowley
20th Sep 2021 12:19

Concur

Whoever gets the leftovers gets the company

Thanks (1)
avatar
By Paul Crowley
20th Sep 2021 12:22

Unless there are assets then just leave it and let it get struck off
But someone or the company has been paying to keep it going

Thanks (0)
By ireallyshouldknowthisbut
20th Sep 2021 12:30

You cant do anything until appointed by the executors to do so.

Then its up to them to either
1. Meet the liability and wind up
2. Not instruct you to do anything.

Thanks (0)
avatar
By Mr_awol
20th Sep 2021 13:15

How old is the company?

If it was formed under the 2006 Companies Act, you are probably fine to consider the next steps.

If older, with no secretary, then you need the new shareholders to appoint a director - but first you need a company officer to register the new shareholders and members - but first you need the new shareholders to appoint a director - but first you need a company officer to register the new shareholders and members - but first you need the new shareholders to appoint a director - but first you need a company officer to register the new shareholders and members - but first you need the new shareholders to appoint a director - but first you need a company officer to register the new shareholders and members - but first you need the new shareholders to appoint a director - but first you need a company officer to register the new shareholders and members - but first you need the new shareholders to appoint a director - but first you need a company officer to register the new shareholders and members - but first you need the new shareholders to appoint a director - but first you need a company officer to register the new shareholders and members - but first you need the new shareholders to appoint a director - but first you need a company officer to register the new shareholders and members - but first you..............

Thanks (2)
avatar
By MattS
20th Sep 2021 14:00

I have unfortunately come across this situation fairly recently - you will need to apply to the courts to appoint a new director - see below for the link to a useful guide I came across.

https://brodies.com/insights/corporate/death-of-a-sole-shareholder-and-d...

Thanks (0)
Replying to MattS:
avatar
By cbp99
20th Sep 2021 15:36

Technically this may be correct. However I saw a case last year (a 1985 company with a single shareholder/director, whose shareholding went to his two children under his will) where the exector's lawyers wanted £20k to sort it out, but Companies House simply accepted forms to appoint the (adult) children as directors, and life went on.

Thanks (1)
Replying to cbp99:
avatar
By MattS
20th Sep 2021 16:47

That definetly sounds like a good win! Lawyers fees quote seems excessive to say the least

Thanks (0)
Replying to cbp99:
avatar
By Mr_awol
21st Sep 2021 09:17

cbp99 wrote:

Technically this may be correct.

No, technically is IS correct.

However, you are right in that Companies House will 'accept' the forms to register the new appointments/shareholdings/etc.

You just need to find a solicitor/client/accountant combo who are either:
a) unaware of the rules, or
b) willing to prepare and file the papers even though they are incorrect.

Note (b) above doesn't necessarily mean 'crooked'. It could mean someone willing to take a 'pragmatic' approach. If it's a contentious estate you don't want to be that guy though.

Similarly (a) doesn't mean 'incompetent' as i suspect awareness of this is fairly low, especially amongst those who may have trained later, dealt mainly with newer (2006 act) companies etc. I suspect there probably wont be legislation to correct this anomaly and gradually people will just stop bothering with the correct process.

Thanks (0)
avatar
By AdamMurphy
20th Sep 2021 16:29

Many thanks for the replies.

Thanks (0)
avatar
By John R
20th Sep 2021 17:35

You need to check whether the deceased appointed someone else to be a director prior to his death. I once had a sole director client who, on his deathbed, told his wife he would like her to look after the affairs of the company. Her solicitor agreed that this was sufficient to be taken as a resolution to appoint her as director.

Thanks (0)
Replying to John R:
avatar
By Paul Crowley
20th Sep 2021 18:50

Sounds to me like that is what all my disorganised will do
I have already advised ALL that they should have a spare director or secretary
Some did
Some did not

Thanks (0)
Replying to Paul Crowley:
paddle steamer
By DJKL
21st Sep 2021 09:21

It is a great job being a spare, for years I was a spare trustee,I did nothing and I said nothing.

Thanks (0)
Replying to DJKL:
avatar
By Hugo Fair
21st Sep 2021 11:15

Sounds like good training to become a govt minister ... is that next on your list?

Thanks (1)
avatar
By Calculatorboy
20th Sep 2021 22:33

These are legal issues , dont waste your time, it follows out of the will, if not then intestacy rules, and even possibly partial intestacy (something that was in the icaew syllabus eons so, but still very useful)

Have a happy wake .

Thanks (0)
Replying to Calculatorboy:
avatar
By AdamMurphy
21st Sep 2021 11:29

That’s what I’ve done, told the surviving fiancée of the position of the company and its debts and to advise the solicitor

Thanks (0)
Lisa Thomas
By Lisa Thomas
21st Sep 2021 11:31

As the Company is insolvent it is probably best to leave it to be struck off by Companies House.

Thanks (0)
Lisa Thomas
By Lisa Thomas
21st Sep 2021 11:32

As the Company is insolvent it is probably best to leave it to be struck off by Companies House.

Thanks (0)
Share this content