1st January, 2026
Estate planning is often associated with personal matters only. Most people mainly think of Wills, Powers of Attorney, or Enduring Guardianship documents. However, business owners must also plan for what happens to their business.
If a business owner becomes ill or passes away, operations can be disrupted. As a result, employees, partners, and beneficiaries may face uncertainty. Therefore, business-focused estate planning documents is essential in New South Wales.
Understanding Powers of Attorney and Business Control
A Power of Attorney allows you to appoint someone to manage your personal legal and financial affairs. This can include your personal ownership interests in a business, such as shares or partnership rights. However, it does not give authority over the company itself, which is treated separately under Australian law.
In a proprietary limited company, a personal attorney usually acts only as a shareholder. They cannot automatically act as a director. Consequently, decision-making authority may be limited at critical times.
If a director becomes incapacitated, shareholders may appoint a new director. This process depends on the company constitution. As a result, control of the business can shift unexpectedly.
Corporate Powers of Attorney
A comprehensive estate plan can include a Corporate Power of Attorney. This document allows a company to appoint authorised representatives. As a result, business continuity can be maintained.
A Corporate Power of Attorney can be limited in time or scope. It may operate during incapacity, absence, or delegation of specific tasks. Importantly, the appointed attorney must be trustworthy and capable.
This approach provides flexibility while protecting the company’s interests. Accordingly, it is a valuable tool for directors and shareholders.
What Happens to a Business When You Die
Business interests typically pass under a Will. However, the structure of the business determines how this occurs. Therefore, reviewing ownership arrangements is crucial.
In partnerships, partnership agreements usually control what happens next. Without clear terms, disputes may arise between surviving partners and beneficiaries and proper documentation is critical to assist in preventing conflict.
Shares in a company owned personally will pass under a Will. However, the company’s assets will not. This distinction often surprises business owners.
A company is a separate legal entity, and it retains ownership of its assets. Therefore, estate plans must consider personal and company holdings separately. Otherwise, outcomes may differ from expectations.
Managing Business Interests During Estate Administration
Executors often face complex responsibilities when a business forms part of an estate. They must assess financial health, liabilities, and ongoing obligations. Whilst stakeholder communication remains critical.
Executors must follow partnership agreements, shareholder agreements, and constitutions. They must also comply with ASIC and legislative requirements. If handled poorly, the estate’s value can be diminished.
In New South Wales, business estate planning involves succession law, corporations’ law, and commercial considerations.
How Our Firm Can Help
Castrikum Adams Legal helps business owners protect their legacy through strategic estate planning. We advise on Wills, Powers of Attorney, Corporate Powers of Attorney, and business and succession structures. We service Byron Bay and surrounding suburbs including Suffolk Park, Bangalow, Brunswick Heads, Mullumbimby, Ballina, Ocean Shores, and Lennox Head.
Obtaining tailored legal advice is an important step forward to ensure your business can continue smoothly and securely.
If you found this blog helpful, please check out our other blogs on Estate Planning.
The content of this Blog does not constitute legal advice, is not intended to be a substitute for legal advice and should not be relied upon as such. You should seek legal advice or other professional advice in relation to any specific matters you or your organisation may have.