Probate is a complicated process at the best of times, but when the estate of a deceased person includes business assets, the process only grows more complex and time-consuming. No matter the number of assets when concerning a business, a grant of probate will always be required.
Is The Business Still Operating?
If the business is still in operation and the deceased was the sole owner, it may become necessary for the person handling the estate to become involved with the daily running’s of the business while things get sorted; this includes but is not limited to administrative tasks, such as dealing with employees still on the payroll.
Eventually, a decision will need to be made as to whether the business will cease operations or whether there is someone within the family or business who is able to step in and continue the running of the business.
Business Partnership Assets
Sometimes in the cases of a business partnership, the deceased may own partnership assets in their own name, these will be dealt with as part of the deceased’s assets. However, what happens to the shares in the business will all be dependent on what the original terms were in the partnership.
Most commonly, the partnership could be ruled by an agreement between the partners or statutory provisions of the Partnership Act, which will state what would happen in the unfortunate event of one of their deaths. The partnership is likely to dissolve, and the surviving partners would be given the opportunity to buy the remaining shares of the business.
Limited Company Assets
If the deceased has shares in a limited company, this is slightly more complicated as these companies often restrict the transfer of shares through the ‘articles of association’, a document which decides who controls the company and what they can/can’t do. This makes it complicated as there is less options for the assets and they may only be transferred to certain individuals which should be outlined in their will.
For more information or help involving probate on limited company assets, consider using Kent based probate services. Working with experts will reduce the chances of a potentially costly mistake.
Valuing The Assets of a Business
Complicating the process further is that many companies will own assets which need to be dealt with, this is more common if the deceased was the sole owner of the business, these assets could be anything from stock, to machinery, to premises.
If this was not complicated enough, inheritance tax is needed to be calculated, and depending on the position of the business, the value of the assets could be reduced by 50% for inheritance tax purposes.
There is the option of Business Relief, allowing some assets to be passed on free of Inheritance Tax or providing you with a reduced bill, hopefully easing the added pressure during this tough time.
Selling Or Transferring Business Assets
The selling or transferring of the business assets is the next step in ensuring the business was dealt with correctly and everyone is benefited, but it can go one of two ways. This could be as simple as transferring the ownership of the buildings or shared, or it could go the other way and be more complex with having to hire commercial property lawyers to assist with the sale or transfer. Once again, the complexity of this process will be based on various factors, mainly concerning the size of the business itself.
