Business Lawyers in Columbus, Ohio
By Drew Stevens - October 15, 2019 - Corporate & Business
Depending on the type of business, many things may occur after the unexpected death of a business owner. Divorce and medical incapacitation may also affect the legal procedures of a business operation, but for now, let’s focus on what the legal procedures are after the unexpected death of a business owner.
If you’re a business owner without a Columbus business attorney to help you determine what documents you need to protect your company, you may think that your business will go directly to an heir or appointed business partner. This is a common misconception, and it’s important that you consult with a business attorney to prepare for the worst.
If the business is a sole proprietorship, it will terminate immediately after the unexpected death of a business owner and its assets are counted as part of the owner’s estate in probate court and administering the last will and testament.
After the death, the estate will liquidate the assets and be used to pay off debts and the rest will be distributed to the heirs and beneficiaries of the estate according to the will of the owner. If there is no will, the assets will be distributed under the state’s probate law.
Oftentimes, if the business is not put into a trust, probating the business will be lengthy and not much will be left of the assets — if any — to the beneficiaries after the unexpected death of the business owner.
If you are a sole proprietorship business owner with no will or trust for your business, it’s best to consult with an Ohio business attorney to guide you through protecting your business and assets after your death.
In the event of the unexpected death of a business owner in a partnership, Ohio Revised Code 1776.61-67 will govern how your share passes through probate. If a partner dies, the business will legally dissolve until the necessary legal steps are taken to restart the business with the legal owners, whether a new one replaces the deceased or with one less partner.
This process can also be very time-consuming, as the entire business and its operations must be valued in order to appropriately evaluate the shares.
These types of businesses run under an operating agreement, which specifies what will happen in the event of the expected and unexpected death of a business owner.
In Ohio, the executor of the deceased partner’s estate has the power to decide what happens to the business interests. The Ohio Revised Code also includes the Uniform Transfer on Death Security Registration Act in section 1709, that allows for members to designate a beneficiary of their securities in the event of their death. But this also depends on the operating agreement to specify the member’s interests in the company and that they are transferable upon death.
Unfortunately, death is unavoidable. But there are ways to prepare for the unexpected. In this case, it’s the unexpected death of a business owner. If you’re a business owner, whether or not you’re expecting the unexpected, it’s important to consult and retain an Ohio business attorney to assist you in protecting business assets after death. One way to avoid a lengthy and devastating probate process is to set up a trust for the business or use the Uniform Transfer on Death Security Registration Act to ensure that your interests and assets end up where you want them. Contact a business attorney with Stevens Law Firm to learn more and consult with a lawyer.