Who owns my company at death?


At death, your shares go into your Will. Your shares are part of your assets. Your executor in your Will looks after the shares and the company. The executor does this in the best interest of the beneficiaries named in your Will. The Executor transfers the shares in the Will to the beneficiaries as soon as possible. The beneficiaries then own the shares and control the company.

Can the executor sack and appoint new directors to run the company?

In Legal Consolidated Wills, your Executor, as the shareholder, can sack and put in new Directors. This is ONLY for the benefit of the beneficiaries. The executor is directed by the beneficiaries in the Will. Remember, the executor does the bidding of the beneficiaries. The Executor is the servant of the beneficiaries.

Do I ‘own’ the assets in my company?

You do not ‘own’ your company. Yes, you own the shares in the company. However, the company is a separate legal entity. It is a ‘person’ in its own right. Just like a human. Well perhaps not just like a human. But it has the status of a separate legal entity.

You are a person. Your company is a person. You are two separate persons.

You own the shares in the company. But it is the company (not you) that owns the assets in that company. This is the basis of the ‘corporate veil’ and asset protection.

Shareholders Agreement


When I die who controls the company? Does the director or the shareholder control the company?

The director (you normally only have one director for asset protection) looks after and runs the company.

  • However, the director is not the ‘owner’ of the company.
  • Instead, the ‘owners’ of the company are the shareholders.

The shareholder (sometimes called member or stockholder) can sack the director. The shareholder appoints the directors as the shareholder sees fit.

If a shareholder does not like the current director, provided that the shareholder has a majority of shares, the shareholder can unceremoniously sack the director. This is done by calling a General Meeting (AGM) of the company.  The shareholder appoints new directors more to their liking.

Do directors need a Will?

Sadly, I was delivering a paper at an accounting conference and the accountants were making fun of yet another poorly written article by ASIC. I took a snapshot:


Can you see ASIC’s first mistake? When a director dies, their ‘job’ of being a director dies with them. That is the case whether the director is a director of:

Do directors die?

Yes, of course, directors die. We are only human. A company may live forever. But humans eventually die.

Succession Planning for a company

Can I leave the job of being a director in my Will?

A director cannot leave the job of being a director in their Will. The job dies with them. Rather, the owner of the shares needs a Will. The lucky people in your Will who get your shares appoint the director or directors. (You normally only have one director for asset protection.)

Does a company need Probate when a director or shareholder dies?

A second error from our friends at ASIC is that because a company is private you usually do not need Probate. Rather the Executor is free to call an AGM and appoint directors as the Executor sees fit. See Section 201F Corporations Act 2001.

Should the executor apply for Probate out of caution to protect the company shares?

There are three reasons to get Probate:

  1. someone refuses to hand over the asset to the executors (e.g. dead person’s real estate that is not owned as joint tenants)
  2. the Will is damaged (e.g. there are staple holes in the Will and no staple, suggesting that there may have been a caveat)
  3. someone is going to challenge your Will (e.g. mistress and illegitimate child)

Included in the cost of the Wills you build on our website is advice on how your Executors can apply for a Grant of Probate themselves. Generally, you do not need a lawyer. So the cost of getting Probate is reduced. Still, most people only get Probate if they have to.

Can the Executors transfer the private company shares before a Grant of Probate?

The Executors are still the Executors whether there is a Grant of Probate or not. But if you are worried then apply for a Grant of Probate. But you can, in the meantime, still, transfer the shares to the Beneficiaries and protect the company.

Can the executor in my Will appoint a new director?

The executor or other personal representative appointed to administer the deceased’s estate may appoint a new director to the company. The director has all the powers, rights and duties of the dead director and keeps the company running. This is until the shares are transferred to beneficiaries who may then appoint new directors if they wish.

Do the Public Trustee or State Trustee (Victoria) control my company when a director dies?

I also have great concern with ASIC’s expression ‘ordinary’ person and spruiking up the ‘Public Trustee’. The ‘Public Trustee’ or ‘State Trustee’ in Victoria charge a fee to be the Executor. This is usually a percentage of your estate! In contrast, most Will makers, in Australia, appoint their Beneficiaries as the Executors. They do the job for free.

For example, if you leave everything to your spouse, your spouse is the executor. Once you are both dead, you appoint all your children as executors.

In my youth, I used to waste my time debating with the Public Trustee as to their ‘value’. On one occasion, the QLD Public Trustee in the heat of the moment blurted out on ABC National Radio, “But Dr Davies by saying that people should not appoint the Public Trustee you are just spruiking up work for you and your lawyer mates.” To which I responded:

  • Legal Consolidated does not do probate or administer estates (we are a taxation and superannuation law firm).
  • we do not recommend lawyers, rather we encourage accountants and financial planners to help their clients apply for Probate for free on the different Supreme Court websites around Australia.

What happens when a sole director dies?

Appoint a Company Power of Attorney, just in case the sole director dies or goes on a holiday.

Where the sole director is also the sole shareholder, however, the risk of uncertainty is much greater. This is even more reason to put in place a Company POA before anyone dies.

What happens if a company has no director?

A company with no director is a ship with no rudder. If there is no company POA then there is no one ‘in charge’ or managing the company. Banks may not process payments. The ATO and ASIC may refuse to ‘deal’ with the company. The company may find itself ‘frozen’.

The Executor needs to appoint at least a temporary director until the beneficiaries in the Will make the final decision as to who will be the director.

When I die do the directors lose their position?

Commonly for asset protection, Mum owns the good thing: the shares in the company. And the risk-taking Dad takes on the onerous job of being the director. (Your accountant and financial planner may call this the ‘man of straw and woman of substance‘.

  • Mum dies: and Dad continues to be the director. Just because the shareholder dies does not mean the director is affected in any way.
  • Dad dies: Mum, as the sole shareholder, hunts down and appoints a new director.

Company Power of Attorney – getting a corporate attorney

Build these company documents online

Superannuation Trustee Company (Special Purpose) – includes ASIC fees  
New company (including ASIC fees) – includes ASIC fees  
Shareholders Agreement  
Deed of Debt Forgiveness  
Deed of Gift  
Power of Attorney for a Company – Corporate POA  
Division 7A Loan Deed – Lending money to a company (revolving; never needs updating)  
Loan to a Company – to prove a loan (escape Debt/Equity rules)  


Replace company rules

Upgrade Company Constitution – also allows for single director company  
Replace Old Memo and Articles of Association – upgrade from Replaceable Rules  
Replace Lost Company Constitution  
Convert Old Company Into a Special Purpose Company – to be trustee of SMSF