Call our team +44 (0) 207 566 3939


What will happen to my shares in my Limited Company when I die?

What will happen to my shares in my Limited Company when I die?

by | Jul 18, 2014 | Blog, Company Formation Services, Uncategorized | 0 comments

Planning for the worst, something that has to be done.

If you are a shareholder of a Limited Company and you die, the shares will go to whoever inherits them under a will or through intestacy. The deceased person`s shareholder will be administered by the executors of the will or if there is no will left, then through administrators of the estate.

The Limited company will need to accept evidence of the probate of the will or letter of administration to establish that the rights of the personal representatives in respect to the shares and ownership. The representatives of the deceases are subject to the Company`s Articles of Association.

Some companies have restrictions on the transfer of shares outlined in the articles, which may allow the directors of the company to refuse the registration of the shares.

It is essential to make sure you have a plan in place in case one of the shareholders dies, it is essential that this process is correctly documented.

Some normal arrangements are as follows:

  1. An agreement that any shares may pass to particular people such as a shareholders partner or children.
  2. Pre emption rights in favour of the existing shareholders
  3. A pre arranged right to buy the deceased shareholders holding with valuation arrangements and a payment schedule.
  4. A cross option agreement, a legal contract between the shareholders and the owner of the shares with an insurance policy which will pay a pre agreed sum which would be used to pay for the deceased shareholders holding. For example the shareholder passes the shares to his partner, the other shareholders then arrange for insurance prior to death to cover the cost of buying the shares back. Upon death, the shareholders then are given the legal right to buy the shares from the partner using the insurance pay-out.

The situation you need to avoid is whereby there is no plan, and a shareholder dies and there are conflicting issues with the will and the companies articles.

If you need professional advice on the above issues, Your Virtual Office London can help discuss the option available to you. We are company formation experts, and have been forming companies since 1971.

Blog Categories

Contact Details

Tel: 0207 566 3939

Fax: 0207 566 39352



Our Location

Capital Office
Kemp House
152-160 City Road
London, EC1V 2NX

Opening Hours

Monday - Friday: 9.00AM – 5.00PM
Saturday: Closed
Sunday: Closed

All You Need to Know About Limited Company Shares

All You Need to Know About Limited Company Shares If you’re set to launch a company limited by shares, it’s important for you to understand all there is to know about these limited company shares and what they mean for your business. Before you begin working via your...

Appointing and Removing Company Directors 101

Appointing and Removing Company Directors 101 There may be a number of reasons you’ll want to remove your existing company director and/or appoint a new individual to the role. Whether you’re planning a major reshuffle at the top for the sake of changing course of...

Where Do I Send My Stock Transfer Form?

Where Do I Send My Stock Transfer Form? Congratulations! You’re either a newly formed business, or you’ve been running your brand from a reputable business address for some time. But with the plaudits comes the pressure; not least the overwhelming number of...

7 Important Roles of a Company Director

7 Important Roles of a Company Director You may be the proud owner of a new business, functioning from a credible business address, and envisioning a bright future ahead. But if you’re unsure about exactly what a company director’s role entails, then you may find...

How to Transfer Company Shares

How to Transfer Company Shares If you’re the proud owner of a business, functioning from a reputable business address, you may soon find yourself making important decisions with shareholders regarding the transfer of company shares.  Shares Defined Before we...

Memorandum and Articles of Association 101

Once you’ve obtained a registered office address, your business will be running in earnest along with the presence of a pile-up of paperwork. You can avoid becoming overwhelmed by the inevitable if you familiarise yourself with vital business terms and documents;...

In a hurry and just want some advice?