As a Sole Trader, have you ever stopped to consider what happens to your business should you pass away?
What is a sole trader?
A sole trader is a person who sets up and runs a business on his or her own account. They usually do the work by themselves (but can employ as many people as they wish ) and in all cases, are entitled to all the profit (and losses) themselves alone.
What is a Will?
A Will is a legal document that you or your Solicitor would prepare to manage and then distribute your assets after you pass away – it would decide things like who gets the home, who gets the chattels and so on.
What is a Business Will?
A Business Will is like a “normal” Will, mentioned above, but the difference is that it deals specifically with what should happen to your business when you pass away.
The issues for a sole trader:
If you are a sole trader, your sole trader business will end when you pass away. Your business assets will pass to the executors of your Will as part of your estate if you have a Will and they will try to close it down in an orderly way as much as is possible.
If you do not have a Will, your estate will instead come under the control of the administrators of your estate once they have been given authority to act, which may take many months.
The executors or administrators would then need to pay any debts or taxes for your business and the estate. They may need to sell some of your business assets to do this.
The executors will then distribute any remaining property or assets (including any business assets or the sale proceeds from them) in accordance with the terms of your Will. If have not left a Will, then the administrators will distribute your net estate according to the Rules of Intestacy.
It will be difficult for someone to restart or continue your business if you do not make a Will and so it is to plan ahead and prepare a Business Will.
Please contact me if you need assistance with your Business Will as a Sole Trader. If you are in a Partnership or own a Limited Company, please find the articles HERE.
Shak Inayat | 075 38 37 38 38
The information provided in this article is not intended to constitute professional advice and you should take full and comprehensive legal, accountancy or financial advice as appropriate on your individual circumstances by a fully qualified Solicitor, Accountant or Financial Advisor/Mortgage Broker before you embark on any course of action.