SUDDEN DEATH of my partner - Stuck in limited company with 2nd property - HELP!

buildingbee

Firstly, thank you again to everyone for your kind words, condolences and sign-posting of breavement support.

Secondly, OH MY GOD! I've got some good news!!!  I wasn't aware of this, but a neighbour-friend said that you can search online for a will on the probate.gov.uk website.  I've searched and it looks like there is a Will in his name after all!!

I'm so glad to hear that bailiffs are unlikely to be involved.  Yes, the only debt the company has is to me and my partner and no one else.

There's very unlikely to be any profits at all, especially after I pay Estate Agent, Solicitors fees and then withdraw any extra money owed as a director's loan to me.  So when you say that the company will owe money to Companies House and to HMRC what are you referring to or how much?

Piercing the corporate veil is a very interesting read and gives me some reassurance that I personally won't be chased for any monies.  We've given no personal guarantees and I'm not going to do anything illegally.

I didn't want to delay the process, so rather than sell the company, I have today contacted a few EA to start the process to put the house up for sale.  One of the EA has said it would have sold very quickly due to high demand for such a property, but the delay is in getting a probate granted.  So in the meantime, I'm going to try to keep occupied in completing renovation work - It's not much - just painting/decorating etc.

Gettingtheresometime - Thank you for your offer.  I may take you up on that.  It might help us both to talk about it.

MobileSaver - Thanks very much for the helpful advice.  Where on the forum is the best place to post on understanding how to wind-up a company?  Also as you know my circumstances which is once I've sold the property, I will be paying myself any director loans that were originally paid to the company and since I don't owe any debt to anyone else and shouldn't have any tax to pay (I assume I'm right on this one as I've not earned any income as such) which option would I chose when winding-up? Members’ Voluntary Liquidation (MVL), Creditors’ Voluntary Liquidation, Compulsory Liquidation?

MobileSaver

buildingbee said:

One of the EA has said it would have sold very quickly due to high demand for such a property, but the delay is in getting a probate granted.

Just a brief comment for now as I'm about to go out and so maybe I'm missing something in my haste but why do you need probate granted to sell the property? The company owns the property and you are a director of the company so you should be able to sell the property tomorrow if you wished...

SDLT_Geek

MobileSaver said:

buildingbee said:

One of the EA has said it would have sold very quickly due to high demand for such a property, but the delay is in getting a probate granted.

Just a brief comment for now as I'm about to go out and so maybe I'm missing something in my haste but why do you need probate granted to sell the property? The company owns the property and you are a director of the company so you should be able to sell the property tomorrow if you wished...

My thoughts entirely.  The company owns the property and it can sell the property without probate being obtained for a former shareholder / director.

buildingbee

Sorry, but I thought that due to my partner being the director of the company and now deceased, we'd need a probate or a will to sell the property?  Or has the EA got it wrong?  If so, I'll contact them first thing in the morning.

Annisele

buildingbee said:

Sorry, but I thought that due to my partner being the director of the company and now deceased, we'd need a probate or a will to sell the property?  Or has the EA got it wrong?  If so, I'll contact them first thing in the morning.

Never take legal advice from an estate agent.

I happen to think the estate agent is wrong - but I'm not a lawyer (and I'm certainly not your lawyer, and you can't sue me if I'm the one who is wrong).

There are ways to set up a company that would mean the company couldn't sell its assets after a director's death, but that's pretty unusual - and generally not a sensible thing to do.

So long as you are a director, and there's nothing in the company's memorandum and articles to restrict what you do, then you should usually be able to sell the company's assets. Sometimes there are restrictions that require board meetings to do certain things, and requirements on how many directors need to be present at such board meetings. But I woudn't expect an estate agent to be advising on that sort of thing; that strikes me as very much a solicitor sort of a thing to do.

buildingbee

You don't need to worry about that because whatever advise you give, I am putting this in writing on the forum that I have no reason to sue anyone as I am fully aware that all of you are simply trying your absolute best to help me with your knowledge and I really really appreciate that.

Thanks for clarifying with regards to the company assets - Not having to get any will or probate, will save me a lot of time, so thank you.

BV88

You should employ an accountant, if the house sells for more than the previous purchase price + costs you (your company) may owe corporation tax. Then when withdrawing the funds into your name you need to consider how this will be done and if you have a potential tax liability if you withdraw the funds in the wrong way. How is the loan structured, is it only in your husbands name for example? If your husband made the loan to the company then you withdraw the funds into your name you may find you have an overdrawn directors loan account on the balance sheet or took an illegal dividend. 

It’s a complex area, an account can save you money but also a lot of stress! 

buildingbee

Hi BV88 -

I'll explain how we did it:-

1. He paid £55 from his bank account and referenced it as "Shares - His Name"
2. I did the same and paid £45 from my own bank account and referenced it as "Shares - My Name"
3. We then paid a lump-sum from our joint personal bank account to the company business bank account and referenced that as a "Director's Loan".
4. After this, we paid for expenses, property etc using the director's loan.

I hope that makes it more clear.

MobileSaver

buildingbee said:

Sorry, but I thought that due to my partner being the director of the company and now deceased, we'd need a probate or a will to sell the property?  Or has the EA got it wrong?  If so, I'll contact them first thing in the morning.

To be fair to the EA, they have probably dealt with hundreds of properties where a partner has sadly passed away and in many cases they'd be correct that probate was required. However in your case the property isn't owned by you and your late partner, it is owned by a limited company which is a separate legal entity.

If your partner had been the (i.e. the only) director of the company then that would have been problematic but as you said initially that your partner was a director and you were also a director then in almost all circumstances you as a director can continue to run the company for the benefit of the shareholders. In other words you alone have the authority to sell the property and could do so today if you so wished.

@Annisele is correct that technically it comes down to what the articles of association for your particular company say but the default model articles of association allow you to run the company and to be frank even in the exceptionally unusual case where your company articles differed I doubt anyone would ever pick up on that given your particular circumstances.

As an aside, if you haven't already, you have a legal obligation to inform Companies House within 14 days that your husband has tragically passed away and then they'll remove his name as a director.

MobileSaver

buildingbee said:

Where on the forum is the best place to post on understanding how to wind-up a company?  Also as you know my circumstances which is once I've sold the property, I will be paying myself any director loans that were originally paid to the company and since I don't owe any debt to anyone else and shouldn't have any tax to pay (I assume I'm right on this one as I've not earned any income as such) which option would I chose when winding-up? Members’ Voluntary Liquidation (MVL), Creditors’ Voluntary Liquidation, Compulsory Liquidation?

Just update this thread when the time comes (which will be months away in the future) as that will give context for everyone.

Assuming the company has no outstanding debts then it will be MVL.

Given the circumstances my advice would be to do whatever it takes (if you can) to ensure the company is solvent so that you can close it down quickly and cleanly and draw a line under the matter. If that means you personally paying some or all of the EA or solicitor fees so that they don't appear in the company accounts or writing off part of your director's loan to the company then so be it; the goal would be for the company to be solvent after selling the property so you can close the company with no possible repercussions.