There can be many difficulties that may arise when an individual dies without a will. But when a Sole Director/Shareholder of a company dies without leaving a will the ramifications can be even more significant. The passing of the Sole Director/Shareholder will often leave the company without any individual who is duly authorised to immediately manage the company.
The starting point for this situation is to look at the Corporations Act 2001 (Cth), whereby section 201F dictates that in the event of the death of a single director/shareholder of a proprietary company, the executor or personal representative appointed to administer the deceased’s estate may appoint a new director to the company which appears to be relatively straightforward.
However, when there is no will, a near relative or other person is required to apply to the state’s Supreme Court, for letters of administration to manage the estate which could take many weeks. Alternatively, if there are not any available immediate relatives or other individuals to deal with the estate, the Public Trustee may take control and administer the deceased estate but this process can also take months.
During the period when there is no director, the company may be rendered inoperative. The company may be unable to trade with banks unlikely to accept instructions in relation to a company’s accounts if they are not satisfied that there is someone duly authorised to act for the company.
If you are a sole director of a company, you should have a will and, it is recommended that in this document you make provision for who is the beneficiary or beneficiaries of your shares in the event of your passing. Please contact our team at Baker Love Lawyers who can assist you with your Estate Planning and Commercial needs on (02) 4944 3322.
