Equity Release – Your Top 10 Questions Answered In our Residential Conveyancing department we are often asked by our clients to give them advice when they are considering Equity Release Schemes. In this Blog, Arlie Asbury, one of our Licensed...
Business in Chaos After Death of Sole Director
Estate planning really is essential, particularly if you own a company, and a failure to take professional advice can store up unforeseen trouble for your loved ones. The point could hardly have been more powerfully made than by one High Court case concerning a company that was plunged into crisis following its founder’s death.
The businessman owned all the shares in the company and was its sole director. His death had left the company entirely directionless, without directors or a company secretary to guide it. Its bank account had been frozen, leaving it unable to pay its staff or tax liabilities. In the circumstances, the executors of his estate launched emergency proceedings in order to save the business.
In upholding the executors’ application under Section 125 of the Companies Act 2006, the Court directed amendment of the register of companies so as to substitute the executors for the deceased as the holder of the latter’s shares. That in turn would enable them to pass a written resolution, appointing a director of the company who would be empowered to put it back on an even keel.
Such relief would normally have been granted only after the businessman’s will had been admitted to probate, but the Court recognised that the case was wholly exceptional. Given the company’s pending liabilities in respect of staff wages and a VAT demand, any delay could irreparably damage the business.