I want to leave shares in my company to my family, what do I need to think about?

You might want to leave shares in your company to members of your family so that they can continue to benefit from the hard work you have put in to building up your business or your investment. However, there are a number of factors you need to consider and writing a Will isn't always sufficient; there can be other complicating factors to take into account.

The company’s articles of association, also known as its constitution, might contain restrictions on who can purchase the shares in the event of your death, and this might not include members of your family. Similarly, if you have a shareholders agreement or even a cross option agreement then it is common for there to be restrictions on your shares. It could be that another existing shareholder has the right of first refusal or it might be that the company’s directors can block the transfer of the shares. All of these restrictions may well trump anything you have in your Will.

Another consideration to bear in mind is tax. Specialist advice should be sought in relation to the tax consequences of any share transfer.

If you are considering leaving your shares to a member of your family, contact us and we will be able to steer you clear of the pitfalls.