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The Corporate Will

Reviewing the overlap between an entrepreneur’s business and personal life has never been more important. Dale Williams explains in more detail the overlap in respect to where business  assets are used to supplement a personal life, or vice versa by looking at the BPE Corporate Wills service. 

BPE has for a number of years offered a Corporate Wills service and given the current climate we think it’s a good time to remind our clients of this service. But what is a corporate will?

A Corporate Will is not a document in itself but rather a process which considers what happens to the overlapping interests if you, as the owner of a business, should die or become incapacitated, or your business suffers a sudden downturn.The process seeks to protects your assets. We work with you in reviewing existing business and personal arrangements to asses them against your immediate and future needs. We help you ensure that your business and personal affairs are in order and provide a plan for implementing recommendations.

From the business aspect the review will start by examining your existing Articles of Association and any Shareholders’ Agreements that are in place, your Finance and Banking arrangements and Asset Structures. By assessing them, we can determine their suitability and revise if necessary. In parallel we will also review your Personal Affairs, any Wills, Letters of Intent or Tax Planning, to understand your current situation and look at potential future or more immediate scenarios.

Once we’ve reviewed your current situation, we will recommend and help you implement a series of steps to ensure you and your business are ready for the now and for the future. Our team has come across many different situations, especially in recent weeks, that need addressing in businesses of all shapes and sizes.

In the current COVID-19 world one important consideration is what to do should a business owner die, or become incapacitated to the extent that they cannot make decisions. Who will be in charge? Have you established powers of attorney that state who makes decisions in such circumstances? Does your business have appropriate insurance cover for principle individuals, and does that insurance cover pandemics?

Some of the areas we consider are below but each business and personal situation is different and we take an holistic approach.

Asset ownership

Where are the assets that you use in your personal and business life held, are they subject to finance, if so where does the ultimate liability lie if there is a default. Should there be consideration to restructuring the asset ownership structure.

Shareholders’ Agreements:

Is there one, and if so, does it cover the share purchase and transfer terms between shareholders (cross option agreements) that may be required if a key person becomes incapacitated. Where may the ultimate ownership and/or control end up. This links to a review of the Articles of Association

Share Option Agreements:

Key to any business is its employees, so identifying important people that you need to keep in place by offering a future equity stake can be effective, as we come out of this current situation key employees may be vulnerable to being poached.

 

Wills and power of attorney:

Wills always deal with business interests as well as personal assets. Ensuring these clearly state what happens to any shares in the eventuality of a death is an important consideration. Establishing a power of attorney ensures that remaining shareholders (or trusted independent third parties) can act collectively should another owner become incapacitated and is unable to contribute to decisions.

Succession and IHT planning:

If you’re passing your shares to your children (or indeed anyone who is receiving them), good inheritance tax planning could reduce the tax burden, while senior managers will need incorporating into Shareholders’ Agreements for any transition period.

Pre and Post-Nuptial Agreements and Cohabitation Agreements:

Whether you are in a new or existing relationship, we advise on how you can plan for the future.


In a nutshell we provide a service to try and take account of your overlapping business and private world. We are more than happy to have an initial free of charge chat to see if there’s anything we can help you with.

 

These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.

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