It is also imperative that your articles of association — which govern how a company runs — are well designed and begin with the end in mind: total chaos prevailing in the event of founder’s incapacitation (we shall not use the word death)!
How directors will be appointed, who can be a director, etc. are all important aspects of company continuity past The End.
Many years ago, a close cousin of mine challenged me to write my will. We were in our early 30s then and she was waxing lyrical about how one needed to be organised regardless of what age one was, as long as one had assets.
“It never ceases to amaze me how even my own friends who are lawyers have not written their own wills!” she exclaimed. Anyway, her exhortations fell on deaf ears. I only got to write my will eight years after my father died, using the same set of estate planning questions that my late father had been given to use by his lawyers.
Answering those questions about what I owned, where it was located and how it was owned really made me reflect on how we organise our assets during our lifetime.
Actually a whole existential self-conversation emerged, because I had never really thought about why I was purchasing what I had and what I intended to do with it, or rather what the poor sods who had to deal with my untidy mess of a death would do with my assets barring any postmortem instructions from me.
To be honest, that self-conversation was not an easy one because I had to look my immortality in the face and give it a name. Actually, two names: The End.
This is the difficulty many of us face, whether young or old. Dealing with The End. But when we don’t, and many of us fall in this category, the repercussions are devastating to our children, spouses, side dishes and their children as well as the whole African kit and caboodle of multi-silent familial existence.
A neater way of putting your affairs in order in your lifetime — The Glorious Middle — without having to write a will that makes you deal with that unpleasant formaldehyde flavoured pill called The End can be to hold your real estate assets in a company.
Whether it is undeveloped land or built up residential and commercial properties, placing them in the name of a company then allows you to name your preferred beneficiaries as the shareholders in the company.
Your own shares will be what will make up your estate and be left to all kith and kin who wish to make a claim on the same.
I hasten to add that you should get competent tax advice before going this route as there are tax implications when property is held in a legally incorporated vehicle.
But the attributes of taking this option is that you can make your spouse and your children (who have attained the age of 18 years) shareholders while remaining the majority shareholder for purposes of control.
In the event of your death, your shareholding then becomes a part of your estate and, in the event you have died intestate — without a will — then it will be divided up by those who are granted the letters of administration to your estate or, in the worst case where there is massive disagreement, be adjudicated and decided upon by a court of law.
The important thing is that the remaining shareholders can still carry on with the business of the properties as it now becomes a matter of company law.
If you’re interested in providing judicial entertainment, you can also set up your Side Dish as a shareholder in a different company where you jointly own property.
In the event of your death, take a park bench in heaven and watch the sparks fly as your spouse and children now make a claim on your shares and they all begin a new life as shareholders joined at your memorial hip.
But the important thing is, you will at least have provided for Side Dish within the legal construct of company law which offers protections to minority shareholders in the event you decided to do Side Dish dirty and only offer them something like a 10 percent shareholding.
It is also imperative that your articles of association — which govern how a company runs — are well designed and begin with the end in mind: total chaos prevailing in the event of founder’s incapacitation (we shall not use the word death)!
How directors will be appointed, who can be a director, etc. are all important aspects of company continuity past The End.
Anyway, I believe the point is made: companies can be used for doing business and can also be used as an efficient, death defying vehicle to hold one’s assets in a perpetual, separate legal entity that can sue and be sued.
They can also be used to help all those disorganised mortals who die and leave this on their tombstone: “Chaos, panic and disorder: my work here is done!”
