Sole Trader Boss has died - what do i do?

ESmith04

Hello!

I've been working for a sole trader as admin/book keeper since May 2023 - he has unfortunately passed away this morning.

Does anyone have any advice over what I am best to do now as according to the online legal web articles, the business bank accounts will be frozen until probate and the business is effectively closed as he was the business. I was due to be in tomorrow to arrange the weekly payroll for the weekly paid staff and the monthly paid staff would be getting paid on 19th of the month.

Its all very messy and there is no family member who works for him to continue with the business etc, just an older brother. 

I suppose until there is more info tomorrow about it all then I cant second guess but I obviously need to work and so don't know whether to just try to obtain another job. I live in a difficult area for part time work so this should be fun!

thanks in advance
Emma

Marcon

ESmith04 said:

Hello!

I've been working for a sole trader as admin/book keeper since May 2023 - he has unfortunately passed away this morning.

Does anyone have any advice over what I am best to do now as according to the online legal web articles, the business bank accounts will be frozen until probate and the business is effectively closed as he was the business. I was due to be in tomorrow to arrange the weekly payroll for the weekly paid staff and the monthly paid staff would be getting paid on 19th of the month.

Its all very messy and there is no family member who works for him to continue with the business etc, just an older brother. 

I suppose until there is more info tomorrow about it all then I cant second guess but I obviously need to work and so don't know whether to just try to obtain another job. I live in a difficult area for part time work so this should be fun!

thanks in advance
Emma

Are there any other authorised signatories to the bank account(s)? 

ESmith04

no unfortunately not, i do have log on details which are authorised for the computer in the office.

Brie

As book-keeper admin do you know if there is enough money available to pay everyone?  Even if it's going to be late?  Is there work on going that will bring in more money eventually for the work that people (including yourself) continue to do?  Is there a solicitor of any sort that has done any work for the business?  

I would certainly try to contact older brother and potential solicitor to find our what they want you to do.  Obviously older brother may be in a bit of a shock or might not know or want to have anything to do with anything to do with his brother.  But it strikes me that the estate must take responsibility for what needs to be done and that you are probably the best placed to help smooth things along with the estate paying you.  On that basis finding out who the executor is might be a helpful thing.  But that's me guessing.

Sorry for your loss.  Whatever you might have thought about your boss (hopefully he was a nice one) it will be a shock to you and your colleagues.

ESmith04

Brie said:

As book-keeper admin do you know if there is enough money available to pay everyone?  Even if it's going to be late?  Is there work on going that will bring in more money eventually for the work that people (including yourself) continue to do?  Is there a solicitor of any sort that has done any work for the business?  

I would certainly try to contact older brother and potential solicitor to find our what they want you to do.  Obviously older brother may be in a bit of a shock or might not know or want to have anything to do with anything to do with his brother.  But it strikes me that the estate must take responsibility for what needs to be done and that you are probably the best placed to help smooth things along with the estate paying you.  On that basis finding out who the executor is might be a helpful thing.  But that's me guessing.

Sorry for your loss.  Whatever you might have thought about your boss (hopefully he was a nice one) it will be a shock to you and your colleagues.

There would just be enough to pay out the wages due but things like the VAT bill and suppliers wont be covered at this point as its extended deeply into an overdraft with not much wriggle room on that now.

I think the older brother will get involved but to what extent but i am not sure. he may know of which solicitor the owner has used previously as i don't have any records of anyone he has used. knowing the executor will be a good start i am sure,  

its sad for his family, they dont appear to be close but a loss is still a loss for them. 

Marcon

ESmith04 said:

no unfortunately not, i do have log on details which are authorised for the computer in the office.

Assuming this was a sole trader operating under his own name (is not through a limited company), then there is no distinction in law between the business assets and liabilities and the rest of the estate.

It's for the executors to dictate the next steps, which is, to put it mildly, unsettling for the staff. 

As you say, you might simply have to wait and hope tomorrow brings at least some element of clarity.

SiliconChip

I don't think you should make any promises of wages to the employees (including yourself). I'm not sure whether HMRC is regarded as a secured creditor but I suspect that will be the case for things like VAT, and in an insolvent estate (which I suspect this may be) secured creditors come higher in the order of payments than wages.

It won't be your responsibility but you may be asked to assist and this could be useful:

https://nationaldebtline.org/fact-sheet-library/debts-after-death-ew/

Grumpy_chap

This does not help the OP in the immediate term, nor will it help the other employees, but I don't think simply having the login details for the accounts give the OP the authority to process transactions, however routine the nature of the transactions.

AIUI, the sole-trader, so the business accounts will be in the name of the individual and should, therefore, be frozen at the death of the individual.

It will all fall to the Executors / Administrators of the Estate to resolve from hereon (presumably the brother).  The OP may wish to support the Executors / Administrators in practical ways.  It is nice to be helpful, but that "work" for the Estate can also be charged to the Estate, assuming there are funds available.  The OP knows about the business accounts but not, presumably, the whole of assets held by the deceased.  

Is the nature of the business such that there are ongoing customer likely to want to continue and any of the employees likely to want to take over the customer base?

DullGreyGuy

Contracts of employment end when the sole trader dies as they are frustrated. The employees claim back wages and redundancy if appropriate from the estate unless the will explicitly hands the business to another person who wants to run it and re-employ the people. If the estate is insolvent then they can claim from the government. 

MattMattMattUK

Whatever you do do not run the pay run tomorrow using the bank details you have, to do so would be committing financial fraud and would create a huge issue primarily for you, but also for the estate. Do not yield to pressure from others if they try to push you to do so.

Savvy_Sue

DullGreyGuy said:

 If the estate is insolvent then they can claim from the government. 

That's the bottom line, but it's not going to be a rapid resolution. I'd be looking for work elsewhere.