The High Court recently considered an application by Executors of an Estate to ensure that the business of a limited company could continue after the death of the sole director.

The business operated by Russell Price Farm Services Limited is seasonal and involves planting which would require payment for machinery in the springtime.

However, the Articles of Association of the company contained no provision for the Executors to appoint a director in the event of the death of the sole director and shareholder. Only members could do this, but the Executors were not members because their names were not on the register.

If the Executors were added to the register of members, they could pass a written resolution to appoint a director but until the Executors’ names were on the register, the company would have no director which meant no-one had the authority to carry on the business.

Therefore the Executors had to apply to Court for an Order that their names be added to the register of members.

Prior to making the Order, the judge sought an undertaking from the Executors that (1) they would not renounce probate, that (2) they would apply for probate as soon as possible, and that (3) they would pay all necessary taxes as required so that probate could issue.

The third point required the Executors to promise unconditionally to pay any taxes (including inheritance tax) personally and in advance of a Grant of Probate being made which caused them some initial reluctance, but eventually they agreed to the undertaking and the Order was made, allowing the business to continue to operate.