The role of a business executor – In a nutshell, expert advice from John Coombs of Simpkins Edwards LLPClick here to view the transcript
When you die it is the responsibility of your executors to administer your estate.
If you own a business the executors will need to keep the business running, either in the short term as the remaining assets are sold off,
or for a longer term if the business is to continue, or be sold as a going concern.
Customers, suppliers and staff all need to be notified that the executors are running the business.
The executors also need to ensure accounts are prepared, tax returns filed and all tax liabilities including VAT are paid, both for the period to
the date of death and the administration period.
So, firstly it is important that everyone makes a will and then considers who would be appropriate executors. This is particularly important for business owners.
In some cases a professional advisor, such as an accountant may be best placed to act as at least one of the executors.
If you own shares in a limited company, it is worth checking if the articles of association or any shareholders’ agreement gives (or should give) the remaining
shareholders a right to acquire these shares.
In addition to dealing with the business an executor has many other duties such as collecting in full details of the deceased assets and liabilities, paying any
inheritance tax, obtaining the grant of probate and distributing the assets as set out in the Will. Executors may be personally liable for any mistakes in the administration.
An executor may also need to consider the tax implications of any actions they take. Some accountants are now licenced to offer a full Probate service, where previously this was restricted to solicitors.
The take away message is ensure to you have a Will and review it regularly to take account of changing circumstances but especially business related issues.