When it comes to writing a will, it’s important to have a plan in place for your business. Here’s everything you need to know about leaving a business in your will.
There are around 5.7 million businesses in the UK. Some are small, sole trader businesses, while others are huge corporations employing thousands of people. But whatever size business you own, it’s important that you have a say over what happens to it when you die.
What happens to my business when I die?
If you’re a sole trader...
Sole trader businesses are the simplest to deal with when writing a will, as any assets used for business purposes are owned by you.
You can leave this type of business as part of your residuary estate when using our online will writing service. This can then be shared between your beneficiaries in any way you choose.
If you are a sole trader and want to leave your business as a specific gift, you may require additional legal advice. Call us today on 020 3695 2090 and we’ll help find the perfect solution for you.
If you own a limited company...
All limited companies in the UK have both a memorandum and articles of association. These specify the purpose of the company and how it should be run. The articles of association may also say what should happen to your share of the business when you die, so it’s important to read these documents when you start writing a will.
If the articles of association include details of what happens to the business when you die, this will usually overrule any wishes left in your will. If the articles of association don’t prescribe what happens when you die, you can use our telephone service to leave your business in your will.
If you’re in a partnership...
When a partnership is formed, a formal partnership agreement usually goes along with it. This sets out what will happen to your share of the business when you die. The terms of this agreement will override any wishes stated in your will, so make sure you take the time to read the initial agreement. If you didn’t create a partnership agreement and there isn’t one in place at the date of your death, the partnership can be forced to cease trading when a partner dies.
If you’re in a limited liability partnership...
All limited liability partnerships should have an LLP agreement or LLP members’ agreement. This is designed to make sure the LLP can carry on if one of its members dies. If you’re a member of an LLP, familiarise yourself with the terms of your agreement before you start writing a will.
Can I leave my business as a gift?
If you’re a sole trader or the sole director of a limited company, you may be able to leave your business as a gift to a specific person (or specific people). This may be right for you if you have a succession plan and want your business to continue trading after you die.
In most cases, leaving your business as a gift requires additional legal advice. Thankfully, this can all be handled over the phone, so you don’t have to take time out to go and see a solicitor.
How to include a business in your will
It’s really important that your executors know about your business as soon as possible, so our online will writing service makes it easy to include as part of your will. When adding a new asset in the ‘Accounts and property’ section, simply choose ‘Business that I own’, then write the name of your business in the box.
Do I need legal advice to leave a business in my will?
There are some scenarios where you may require additional legal advice before writing a will, including:
If you need help understanding or putting in place agreements governing your business.
If you want to leave your business as a specific gift
If you need help putting provisions in your will to pass on what you’re entitled to from your business under any business agreements already in place
If your estate is large enough to pay inheritance tax and you want to make the most of reliefs available for business assets.
If you own a farming business.
What is an executor of a will and how do you appoint them?
Write your will today with Farewill
Our will experts are available 7 days a week to help find the perfect solution for you and your business.