No one likes to talk about it, but death, just like taxes, is inevitable. But unlike taxes, we never know when our time will come due. No matter how young or old you might be, if you are a business owner you need a will as much, or more, than anyone else.
Without a will, your business ownership remain in a state of limbo until your estate receives a grant of probate from the courts. Your ownership in your business as a shareholder or partner is a personal asset of yours (just like any other asset you own) and it cannot be sold or transferred until your estate obtains a grant of probate. The probate process typically takes at least one year, and that is if things go smoothly.
Likewise, if you are a solo business owner without a will, there will be no one with legal authority to act as the manager of your business until the court appoints someone to take control – this means there will be no one with legal authority to sign contracts, file annual company reports, sign tax returns, or deal with the day to day banking and business matters. As such, there is a risk of your business breaching its contractual and legal obligations and becoming in arrears in its financial obligations. The end result is a diminishing value of your estate and your business, due to paying legal and court fees,
Even if you have a shareholder agreement in place, but have not made a will, there is no one with legal authority to represent you and protect your interests in your business during the waiting period. The situation is similar if you were to become incapacitated due to illness or an accident. This is when a corporate power of attorney (POA) protects you and your business.
At the most basic level, a will and corporate power of attorney permits you to appoint a person of your choice with the legal authority to take control of your business, or at least your share of the business if you have business partners. In addition to appointing someone you trust to manage your estate, there are a variety of tax planning opportunities available for business succession planning and tax rollovers simply through making your will.
As Guy Lombardo and His Royal Canadians sang – “its later than you think”.
Let us help you get your business affairs in order so you can enjoy yourself without worry and reach out to us at: email@example.com