If the association agreement opposes the statutes, priority is given to what is enshrined in the statutes. It is also common practice for the remaining shareholders of a company to repurchase a shareholder`s shares after his death by pooling their resources and acquiring the deceased`s shares equally between them. The entire share portfolio of the deceased may also be repurchased by a single shareholder or person. If a partner dies, ownership of his shares may be transferred to the heir who inherits it according to the will of the deceased shareholder, if there is one, or according to the rules of the intestine. However, this provision is subject to provisions of the company`s by-law and the shareholder contract (if any), which are a priority and may include restrictions on the transfer of shares. If your private company was created with standard items and there is no shareholders` pact, you can take steps to eliminate the risks associated with shareholder death. A good starting point are our blogs in view of when you might have expanded statuses and how to change the statuses of a company. You can also read our articles explaining what a shareholder pact is, and if you`re thinking of designing one to eliminate the risks of shareholder death, you can also find our piece on what needs to be included in an invaluable shareholder pact. There are many possible solutions, with the most appropriate depending on the circumstances of each company. It could be so simple to include the right of personal representatives to appoint a director after the death of a single director or to include the right to give surviving shareholders the first opportunity to purchase the deceased`s shares. If the single shareholder and the manager of a company die, practical questions may arise.
This is because the deceased may be the only person entitled to exercise certain powers, such as the appointment of new directors, the transfer of shares and the payment of employees, suppliers and other creditors. A lawyer should be someone the contractor trusts to act in his or her best interests. There may be another family member who is involved in the business and can act as a lawyer, or the business owner may have confidence in the other directors or shareholders. However, with a little premonition, all the risks mentioned above can be avoided. The adaptation of the company`s statutes or the composition of a custom shareholder pact ensures the future ownership and control of the company.