If you a Shareholder of any company or holding stocks of a company for getting profits, it becomes really important for you to consider who will inherit your business shares or interests. If it’s not documented during your lifetime, it could result in excessive inheritance taxes for loved ones, or loss of value, afterwards.
In this blog I will address your silent worries, which you might not discuss openly, but running in a corner of your mind.
Why is Will writing important?
- The benefit of Will is that there's a peace in mind that the business will remain consistent even after death. The values and vision for the business can be withheld as long as a solid exit succession strategy will be implemented.
- Exit planning and after death plans may sound morbid, but any company could end up in disarray without a strategy in place.
- After life as a shareholder, the courts will also appoint an administrator to wrap up your estate, and that person will deal with your business interests.
What can go wrong if you don’t write a Will as a Shareholder?
- If a shareholder dies without leaving a Will, their business or shares would pass in accordance with the succession laws in India
- If a Shareholder is the sole one responsible for signing contracts and agreements. What would happen if he suddenly died and had not appointed anyone in his place to legally handle these tasks can create a big mess.
- Without a Will there's Court's involvement in appointment of successor, there can be possibly some type of interruption to deliver products or services.
- Without a succession plan, it can create inner turmoil among associates or members of the company.
- If there's no beneficiaries or non Will items, and the Shareholder has passed away, the assets automatically go into probate. By chance the Shareholder has taken loans or debts in establishing or promotional activities, first of all debts will be paid off and the remaining assets are distributed to heirs.
Should Shareholders need to write a Will even if they have a Nominee?
- Yes. We all know that the nominee is merely a custodian but has no rights over the shares.
- The nominee cannot inherit the shares unless that is specified in a Will.
Do you need a separate corporate will for your business assets or Shares?
- No, there’s no need for a separate corporate Will.
- Your shares are treated like any other assets you have such as your vehicles, flat or your favorite artistic work.
What steps should you follow for succession planning?
- Start Mapping out your thoughts like who will replace your role in your business?
- Would you want your business to shut down or run smoothly after your death?
- Noting down your confidential information is a good way to start, for example: access to your online business accounts, details of your loans or corporate taxes. Start discussing these crucial points with your family members or business partners.
This is the right time to start thinking and make a Will. After making a Will, you will be in peace of mind that your hard earned assets, shares, values and everything is in safe hands.
If you have additional questions on Will writing in India, please write us at firstname.lastname@example.org
www.aasaanwill.com, easy, affordable & secure place to start your Will writing journey. AasaanWill. Zaroori Hai!