If the sole director and shareholder of a company die without leaving a will, the risk of uncertainty regarding the operation of the company is much greater because:
- there is no one with the legal authority to make financial or business decisions on behalf of the company;
- the company cannot be easily sold, as there is no legal owner of the shares who could authorise their transfer; and
- it takes time (several months) to apply to the Supreme Court for letters of administration to manage the director's estate and during this time, the reputation of the company can also be severely impacted.
ASIC's information sheet: Importance of sole company directors/shareholders having a will outlines some of these issues.
More Cleardocs information on related topics
You can read earlier ClearLaw articles on a range of company related topics.