A loved one passing away is a very difficult time. If your husband had his own business and has left it to you, you now have the same rights and obligations in the business that your husband did as an owner, partner or shareholder.
Let’s assume that your husband was the sole owner of the business and there are no partners or other shareholders involved.
If your husband was the sole owner, then you generally have 3 options available to you:
1. You can take over your husband’s position and continue running the business.
2. You can sell the business to a third party.
3. You can wind up the business.
Each option is briefly evaluated below.
Continue running the business
If you were always heavily involved with your husband’s business and you are a business savvy individual, then you can consider stepping in your husband’s role and continue the business as is. This means that you need to, as soon as possible, have a good look into the business’s debts, contacts, and other records to ensure that you are sure of the responsibilities and obligations of the business. If you are stepping into the business as a director, then there are directors’ duties which are applicable to you under the Corporations Act.
Sell the business
If you were not involved with the business, or if it is an area that you are unfamiliar with, it may be a good idea for you to simply sell the business to a third party. Selling a business can be a complicated process as it may require a proper valuation of the business including any stock, equipment, good will and existing contracts, and depending on the nature of your business, transfer of licenses and certificates. It is also important, on the sale of the business, that all obligations and liabilities of the business are properly transferred to the purchaser. To ensure that the business is properly transferred, it is best to seek the assistance of a lawyer when selling your business.
Wind up the business
If the business is a company, and you are not interested in continuing the business or selling it to a third party, you can consider winding it up. A company remains registered as a company even long after it ceases trading and is still subject to the same requirements which include paying fees to the Australian Securities & Investments Commission (“ASIC”). If there are no other shareholders involved in the business, you can apply to ASIC to voluntarily deregister the company, assuming that the company meets certain legal requirements.
Professional assistance should be sought if you are unsure of the proper procedures.
LegalVision’s lawyers specialise in assisting small businesses. If you are unsure of what to do with the business that your husband left behind, or if you do know what you want to do but are unsure of how to go about it, give us a call today and let us help you.