Florianstamp

If your 16 and your father dies and your mother is already dead.

You inherit a company from your father thats worth lets say £10million

could you just sell it?
what would go on?

lin

Hard to say in UK, but I believe in the US since the heir is a minor the company would be placed in an escrow or trust to be managed until the heir reaches majority.

Unless there are codicils against it in the will, I would assume the kid could sell the company...that is, petition the trust to sell the company. The funds then possibly to also be managed by a trust until the kid hits an age where the trust drops in.

So much of all this depends on the terms of the will.

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lin

And if you're working on a plot, there is CERTAINLY room for plenty of hanky-panky between the executor, the trust officials, and the company management.

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Non Serviam

Technically you'd inherit the shares. You wouldn't necessarily inherit your father's position in the company (if he were Managing Director or Chairman of the Board, let's say).

In the most simple scenario, your father owns all the shares in the company (highly unlikely with a £10 million company, there would legally have to be at least two shareholders, but I suppose it's theoretically possible that your dad had all the shares but one and your mum had the other).

In that case what you can do with them depends on whether it's a Limited Company or a Plc. You'd be best advised to take legal advice, then consider offering to sell the shares to other people on the Board. Your solicitor would probably handle that.

It'd be quite a while before you saw the money, and some of it might be payable in monthly installments given the amount, in which case you'd cease to own the company but you'd hold a kind of security called a debenture over it.

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Born naked, helpless, unable to care for himself and completely open-minded, Non Serviam has subsequently surmounted all these difficulties and gone on to become a decently-clothed, self-sufficient, close-minded sod.

Florianstamp

this is only a bit of flashback in my novel. it wont play much part.
but isnt it possibleto have a company that isnt on the stock market and therefore has no shares?

Non Serviam

Yes, but not in any useful sense.

There are three kinds of company in British law:

1) A company limited by guarantee;
2) A private company limited by shares; and
3) A public company limited by shares.

The companies you see traded on the stock market have "Plc" after their names and their shares are traded on the stock market openly.

The companies with "Ltd." after their name are usually private companies limited by shares. There are still shares, it's just that they aren't traded on the stock market--but they're sometimes sold between the individual shareholders.

Companies limited by guarantee are things like charities, unions, clubs or sports organisations. In the UK, oxfam is a company limited by guarantee. They aren't usually corporations that trade for profit.

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Born naked, helpless, unable to care for himself and completely open-minded, Non Serviam has subsequently surmounted all these difficulties and gone on to become a decently-clothed, self-sufficient, close-minded sod.

Florianstamp

So what sort of company would be worth about 10 mil and be an LTD

Non Serviam

Could be anything, but to pull out some random examples:

• A large shop with valuable inventory (e.g. a jewellers')
• A small chain of shops
• A car dealers/mechanical workshop
• A fairly substantial estate agency
• A property portfolio or holdings company
• A very successful hairdressers'
• A firm of architects or chartered surveyors
• A haulage, freight or shipping firm
• A vetinary practice
• An established independent financial advisers' agency
• A small mail order catalogue
• ... or many more

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Born naked, helpless, unable to care for himself and completely open-minded, Non Serviam has subsequently surmounted all these difficulties and gone on to become a decently-clothed, self-sufficient, close-minded sod.

Florianstamp

Cheers Non Serviam!
S'alright if I use one of those in my writing?

Non Serviam

Sure.

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Born naked, helpless, unable to care for himself and completely open-minded, Non Serviam has subsequently surmounted all these difficulties and gone on to become a decently-clothed, self-sufficient, close-minded sod.

lin

I asssumed from the first post that he wasn't talking shares, but a privately or closely held company.

Ten million could be in inventory, but also "on paper" in the form of contracts or receivables. Or even a failing magic shop located on urban property now worth millions.

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Non Serviam

Dunno bout the US, but in the UK a privately or closely held company has shares unless it's limited by guarantee.

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Born naked, helpless, unable to care for himself and completely open-minded, Non Serviam has subsequently surmounted all these difficulties and gone on to become a decently-clothed, self-sufficient, close-minded sod.

Mike C

Yes, but that shareholding can be theoretical - you only need 2 directors, who hold shares - the shares can be divvied any way they want; the minority shareholder may hold as few as one share.

Also a business can be in sole proprietorship - no shares, no directors, just a guy who owns a business. And £10m isn't that much any more.

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lin

That's what this sounds like, all right. I had a hard time believing that even in Jolly Olde you'd have to set up shareholding to open a store.

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Non Serviam

Or indeed a partnership. But the question was specifically about companies.

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Born naked, helpless, unable to care for himself and completely open-minded, Non Serviam has subsequently surmounted all these difficulties and gone on to become a decently-clothed, self-sufficient, close-minded sod.