Closing business account

28tsw

Feeling v overwhelmed right now and it’s really upset my mum just in time for an already hard Christmas 

dad was self employed and had own business as a consultant. My mum has some shares in it but no documents etc as never got involved. There is under £10k in the business account. The bank are asking for grant of probate or stocks transfer forms - we have neither and probate hadn’t been required for anything else. We thought the amount in the account was too low to need probate? Accountant indicated it’s amount is due to my mum as the remaining shareholder.

It feels like a stock letter was sent to my mum as it doesn’t make sense to us and we don’t know who to ask for help!

Grumpelstiltskin

How was the business operated?
Limited Company?
Sole Trader?
Partnership?

28tsw

Limited company I believe. Sorry we are complete and utter novices/ignorants on this topic 

Marcon

28tsw said:

Feeling v overwhelmed right now and it’s really upset my mum just in time for an already hard Christmas 

dad was self employed and had own business as a consultant. My mum has some shares in it but no documents etc as never got involved. There is under £10k in the business account. The bank are asking for grant of probate or stocks transfer forms - we have neither and probate hadn’t been required for anything else. We thought the amount in the account was too low to need probate? Accountant indicated it’s amount is due to my mum as the remaining shareholder.

It feels like a stock letter was sent to my mum as it doesn’t make sense to us and we don’t know who to ask for help!

I can imagine it must all feel like a weight pressing down on you and at the worst possible time of year.

If your mum owned shares, then from what you've said, your dad wasn't self employed - he would have been running a limited company. Is anyone else a signatory to the business bank account? if so, and they can sign without needing a countersignature from your dad, see if the bank would permit that (in many cases they will).

Stock transfer forms can be downloaded here (and plenty of basic info about them): https://www.gov.uk/guidance/stamp-duty-on-shares

The person who should be helping you is either your accountant, who is already fully familiar with your dad's business, or the bank's bereavement department. Neither seems to have exactly covered themselves in glory.

gettingtheresometime

I'm in your mums position - husband & I had equal shares in our ltd company when he died & it sounds as if you're confusing what happens to money in a personal bank account as opposed to the situation here where the money is in a business account.

it's my understanding that the shares your dad held will form  part of his estate so assuming it's a 50/50 split then half the value of the company will 'belong' to your mum & the other half will go into your dad's estate.

Theoretically, the company could continue to trade but if like my situation, your dad was effectively the brains of the company, then effectively the company is dead & needs to be wound up - was it just your dad working in the company or were there employees?

if it does need to be wound up the accountant needs to advise you the best way of doing this. I would imagine that at this point, the money could be withdrawn and distributed to the shareholders. 

You may want to ask the accountant if it would be more tax efficient for your mum to take the money out of the account as a dividend. 

28tsw

Okay thanks both, we had contacted accountant yesterday for help so hopefully he can. 

It was a 70/30 split on shares and my dad was only person involved in the business- don’t think there is any one else who is a signatory? I have no idea anyway 

gettingtheresometime

28tsw said:

Okay thanks both, we had contacted accountant yesterday for help so hopefully he can. 

It was a 70/30 split on shares and my dad was only person involved in the business- don’t think there is any one else who is a signatory? I have no idea anyway 

Ok so 70% of the company's value forms part of your dad's estate with the other 30% belonging to your mum already.

For now, there's not a lot you can do but you may want to start thinking about making sure everything is invoiced & all invoices are paid, and making a list of the money owed by the company so you'll be in a position to wind the company up as soon as is practical.

It's never easy when someone dies but it seems especially harder when you've got this extra layer to deal with. As I said I'm going through it now myself, so know exactly what you & your mum are going through

28tsw

Okay so accountant said we need to close business bank account first and bank says we need to close business first. 

What do we do?? 

Business was not trading due to my dad being on furlough since Covid began. No bills or invoices etc I don’t believe as he was paying himself furlough money 

Marcon

28tsw said:

Okay so accountant said we need to close business bank account first and bank says we need to close business first. 

What do we do?? 

Business was not trading due to my dad being on furlough since Covid began. No bills or invoices etc I don’t believe as he was paying himself furlough money 

Great - just what you don't need. The priority is to ensure any funds are withdrawn from the bank account before the business is dissolved, otherwise you'll find yourself (or the bank will) with 'orphan' assets which will pass to the Crown.

I had a look online to see if there was a decent, straightforward guide and thought this might fit the bill: https://www.cheapaccounting.co.uk/blog/index.php/how-to-close-your-limited-company/

28tsw

Thank you - you’ve also affirmed the accountant. It’s clearly the bank who are being useless.

Savvy_Sue

It's possible the bank aren't useless: they may be coming at this from a different angle.

Follow Marcon's advice and withdraw the funds, then close the company and tell the bank.

Because if you say to the bank "we want to close this account so please send all the money to XYZ', they may say 'we can't do that because the account belongs to a limited company.' 

Don't know if that makes sense, but to me it's all in the way you word it.