Florida business attorney<\/a> can determine which structure is best, based on the partners\u2019 circumstances and business goals.<\/p>\nSole proprietorships, corporations, and LLCs all have different trajectories when a partner passes away.<\/p>\n
Sole Proprietorships & Succession Plans<\/b><\/strong><\/p>\nSole proprietorships are businesses where the owner and the business are legally the same.<\/p>\n
That means, if the owner passes away, the business also ceases to exist.<\/p>\n
The business assets will be liquidated by the estate to pay off any debts and the balance will be distributed to the estate\u2019s beneficiaries.<\/p>\n
Corporations & Succession Plans<\/b><\/strong><\/p>\nUnlike, sole proprietorships, corporations do not cease to exist when an owner passes away.<\/p>\n
When a Florida corporation owner passes away, the estate automatically becomes the owner of the deceased\u2019s shares.<\/p>\n
The same is true when a single shareholder or majority shareholder of a corporation passes away.<\/p>\n
His or her estate becomes the new owner of the company until the estate is closed and the shares are distributed according to either the decedent\u2019s will or Florida\u2019s intestacy laws.<\/p>\n
LLCs & Succession Plans<\/b><\/strong><\/p>\nFlorida LLCs operate under the terms of an operating agreement, making them much different from other business formations.<\/p>\n
The operating agreement usually specifies what will happen in the event one of its members passes away.<\/p>\n
The agreement will dictate whether the business should continue and if surviving members may allow new members in.<\/p>\n
If the agreement does not outline a succession plan, Florida law will determine the next steps, which could result in the dissolution of the business and the distribution of the assets.<\/p>\n
Partnership agreements can provide alternatives to the closure, including sales, acquisitions, or details that allow the business to continue operating.<\/p>\n
If you are a business owner who is navigating the details of a partner or shareholder\u2019s death and are unsure of the legal requirements, we can help outline the details of your unique circumstances during a free case assessment.<\/p>\n