Research and reports
If you own your own business, you’ll know what an important role they can play in our lives. As well as being your livelihood and main source of income, businesses are usually born out of genuine interest and passion. They say if you love what you do, you’ll never work a day in your life – and the self-employed know this better than most.
Which is why it’s so important to protect your business – as well as those important to you – once you’re no longer around. Wills for business owners make sure your business is protected if the unthinkable happens. Keep reading to learn more about writing a will as a small business owner.
Will writing is the act of making sure your business is protected once you’re no longer here. While most people will write a will for their personal lives and assets, business owners also need to account for what will happen to their business.
By failing to properly prepare a will for your business, you risk your business transferring to somebody who doesn’t want to take ownership of it – or someone who doesn’t have the right skills or experience to continue your work.
Not properly laying out your intentions in a will can also cause conflict in the business, or worse, cause it to cease operations.
You can find out more about succession planning in our guide.
Before you start writing your own will, you’ll need to think carefully. What happens next will depend on whether you’re registered as a sole trader or if your business is a partnership. If you’re a sole trader without employees and shareholders, it’ll be much simpler to leave your business to someone else in your will as part of your estate.
Things get more complicated when you’re in a business partnership or own shares. This will require more legal support, so paying for professional will writing services can be beneficial here.
If other people have shares in your business, you need to make sure that your will isn’t in conflict with the Shareholders Agreement. If there’s a conflict, the other shareholders may be able to block the transfer of shares to your beneficiary.
Whenever you’re planning for inheritance, you’ll need to think about the implications of inheritance tax. Luckily, certain businesses can qualify for business property relief.
This can reduce the value of your business when working out inheritance tax, offering relief of either 50 per cent or 100 per cent on your business’s assets.
Business property relief can be claimed on:
There are certain requirements in order to benefit from business property relief but the two main ones to note are:
If your business doesn’t qualify for business property relief, your beneficiary will have to pay the full amount of inheritance tax.
With so much at stake, it’s a good idea to use a will writing solicitor to handle this process for you. A legal professional, such as a solicitor, can offer advice on the legal technicalities related to transferring your business ownership.
Typically, hiring a solicitor to write your will will cost upwards of £250. This is the price for a more simple will, so this price will increase if your business structure is more complicated. You may choose to hire a solicitor who has a business specialism, which can increase the price even more.
A cheaper option is to use a will writing service. You can find these services online and they often cost less than £100. However, it’s important to note that these services often aren’t regulated, meaning you have less protection if things go wrong. On the other hand, solicitors are regulated by the Solicitors Regulation Authority, so you know your will (and your assets) are in good hands.
An even cheaper option is writing your own will. If your business is small and newly formed, under a time crunch, or you just don’t have the budget right now, technically you are able to write your own will.
If you choose this option, you need to make sure that your will is signed and witnessed by two adult witnesses (though they can’t be beneficiaries). This can take place in person, though it is also legal to do this remotely through a virtual service such as Zoom.
However, this option doesn’t come with the legal protection of going through a solicitor. So whilst there’s technically no legal constraints to writing your will this way, getting professional help can make sure everything goes according to plan.
Ultimately, your will is a personal document that reflects you and your business. However, here are some questions you may ask yourself when writing a will:
Once you’ve finished writing your will, you need to make sure it’s kept safe. You can store your will in a safe place at home, or store it with your solicitor, your bank, professional will storage company, or at the Newcastle District Probate Registry.
Have you written a will to protect your business assets? Let us know if you have any tips for business owners thinking of doing the same.
With Simply Business you can build a single self employed insurance policy combining the covers that are relevant to you. Whether it's public liability insurance, professional indemnity or whatever else you need, we'll run you a quick quote online, and let you decide if we're a good fit.Start your quote
Rosanna Parrish is a Copywriter at Simply Business, specialising in legal and HR content. Trained at London College of Communication, she has been creating content professionally for eight years at publications across the UK and Spain. Starting her career in health insurance, she also worked in education marketing before returning to the insurance world. Rosanna also writes about wellbeing in the workplace. She lives by the sea and does her best writing in coffee shops.
We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer
6th Floor99 Gresham StreetLondonEC2V 7NG
Sol House29 St Katherine's StreetNorthamptonNN1 2QZ
© Copyright 2023 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.