When a Californian who owns a business dies and creates a probate estate, the business owner’s affairs must be sorted out and when appropriate, the business must continue to operate. The business is an asset of the probate estate. Payroll must be met, contracts must be fulfilled, bills must be paid and the business property must be addressed in an orderly fashion.
Immediate business needs may be addressed by creating a “special administration” rather than waiting for the appointment by the California probate court of an executor.
Sole Proprietorship. California Probate Code sections 9760-9763 deal with the California representative’s role in handling those business affairs of a sole proprietorship.
Partnerships. Partnership businesses are governed by California Probate Code sections 9761-9763.
Corporations. California corporations in which the decedent was a shareholder are not governed by sections 9760-9762 since the remaining members of a board of directors, officer or managing employees can operate the business. When a shareholder dies, the issue is one of what to do with the deceased shareholder’s stock which is governed by whether there is a Will or a buy sell agreement between the shareholders.
The executor usually does not become personally involved in the day-to-day operation of the California-based business unless he or she has experience in the kind of business owned by the decedent. The executor ordinarily obtains court approval to employ independent management who are qualified to run the business.
For probate help, call a California probate attorney. Call Mitchell A. Port at (310) 526-3433.