Clause 8.3.3 of the Wills and Inheritance Protocol states, in the context of an unincorporated business, if there is someone with day-to-day knowledge of the running of the business, discuss the appointment of that person as a limited executor; discuss the powers they should have; and, if instructed, draft any such appointment. The section of the Protocol regarding limited companies states, if the limited company is a one-person business, consider 8.3.1 to 8.3.3. A few questions come to mind:
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Is a limited executor of a limited company, the same as a limited executor of the shares of the company?
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Does one need to check the company’s constitution to see whether the personal representative of a shareholder has any authority to manage the company?
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Can a clause appointing a limited executor of a limited company define their powers. I thought their powers would be defined by the company’s constitution, which would set out the authority of personal representatives of shareholders.
Not only can a a limited company not die but cannot make a Will and so cannot have an executor. Although in the modern era when feelings supersede reason, and impact triumphs over intention, if a limited company chooses to make a Will who are we non-intersectionalists to challenge it?
Thanks for your response. I am not saying the company wants to appoint an executor. I am saying a person may want to appoint an executor whose sole role is dealing with their company and a separate executor for the rest of their estate.
It’s not something i’ve seen and seems unnecessarily complicated but:
must be; the estate’s asset is the shares
definitely check before trying to run a company as its shareholder. I would imagine the executor would need to be appointed as a director to represent and manage the company (or would be a shadow director which cannot be good).
this would be referring to their powers as executor (i.e. power to sell, compromise etc) not the provisions of the articles. I would imagine that, should you go down this route, you would want to give all executors the same full administrative powers in relation to their specific estate assets.
People who manage limited companies are usually called directors. If a company has no director because, for example, a sole director has died, the shareholders can by ordinary resolution in a general meeting appoint a new director or directors. I can’t see the point of making the new director(s) limited executor(s).
Check the articles of association. Clause 17(2) of the model articles:
“In any case where, as a result of death, the company has no shareholders and no directors, the personal representatives of the last shareholder to have died have the right, by notice in writing, to appoint a person to be a director.”
If the articles have a clause similar to that of clause 4 of the model articles, the executors, as shareholders, might be able to limit the actions of the director(s).
Thank you, Duncan. That all makes sense. It seems that the, as the shareholders of the last to die have power to appoint directors, there is limited benefit in appointing a limited executor of the company. The only reason I can see for doing that is perhaps a person has some reason for wanting a person different from the general executor to have the power to appoint directors, i.e. an executor of the company.