Transfer of deceased's shares in Private Company

[Frivolous]

My father operated his business as a sole trader and prior to his death last year we set-up a Ltd. Company to carry on the business after his death (he was 90 years old). The Company had 4 shareholders being my father with 96 shares and his 3 children ( the equal beneficiaries in his will) with 1 share each. The total Capital of the Company at the date of death was €99. Now my question is what should we do with his 96 shares? Under his Will all his assets are to be split equally between the 3 children - would it be better to transfer the 96 shares equally between the 3 children or would it make more sense to cancel or redeem the 96 shares leaving the 3 children with 1 share each? I'm concerned because when the statement of assets was submitted to the Revenue for Probate the 96 shares (value €96) were inadvertently omitted - I know the value is immaterial but would it raise questions with the Revenue if we were to now transfer the 96 shares to the 3 children ( I believe you have to inform Revenue of the transfer for the purpose of calculating stamp duty).

 

[jpd]

I don't think the value of the shares for probate is the nominal value of the shares but should reflect the value of the company as reflected in it Balance Sheet

Is it true the assets of the company only amounted to € 100

What was the point of the company?

 

[Frivolous]

The Company was set-up with Share Capital of €99 prior to the death of the owner to ensure that the business was able to continue to operate after his death. The Company therefore only started to trade on the date of death with net assets of €99 ( €99 cash held in the company's bank account).

 

[T McGibney]

You will presumably need to pose these questions to whoever advised you to form the company in the first instance. It's difficult to comment meaningfully in isolation.

 

[Frivolous]

I didn't take any advice on setting up the company for this purpose, .Where you have a sole trader operating a business you have to consider what will happen to the business after his death - if it is intended that the business continues to operate after death then setting-up a company with the beneficiaries as the shareholders is the obvious route to take - otherwise the business dies with the owner? I presumed (maybe incorrectly) that this was a normal method of ensuring the continuation of the business and with the benefit of hindsight I see no reason to think otherwise.

 

[T McGibney]

I didn't take any advice on setting up the company for this purpose, .Where you have a sole trader operating a business you have to consider what will happen to the business after his death - if it is intended that the business continues to operate after death then setting-up a company with the beneficiaries as the shareholders is the obvious route to take - otherwise the business dies with the owner? I presumed (maybe incorrectly) that this was a normal method of ensuring the continuation of the business and with the benefit of hindsight I see no reason to think otherwise.

It isn't. The business merely continues with a successor if this is what is desired.

You should really be getting some proper professional advice.

 

[Frivolous]

That wasn't the desire - my father's desire was that the business continued with all 3 children as successors - 3 successors couldn't continue as a sole trader so formation of a company was the logical way forward.

 

[T McGibney]

That wasn't the desire - my father's desire was that the business continued with all 3 children as successors - 3 successors couldn't continue as a sole trader so formation of a company was the logical way forward.

Did you not examine the possibility of forming a partnership?

You really need professional advice here.

 

[Frivolous]

Yes, we considered the partnership option but choose the company option which (mainly for tax reasons) was by far the preferable option. The only advice I'm looking for is whether transferring or redeeming the 96 shares is best.