Starting a new business? Get 40% off our accountancy services for 3 months! 😀


The untimely death of a business owner is just one of those subjects you don’t want to broach really isn’t it? That’s why, in this blog post, we’re asking the question for you and then doing our best to provide some informative advice. It might be a bit of a morbid topic to touch upon but unfortunately, it’s one that needs covering.

The situation for sole traders

In the circumstance of a sole trader passing away, the business essentially dies with them. As their business and personal finances are one, anything they owned falls into their Estate when they die. It will be dealt with via the business owner’s Will or inheritance.

Assets will be sold to clear any debts or outstanding balances, and anything left after that will be left to the deceased’s family to settle. This covers things like debts and loans, mortgages, employee wages, and unsettled invoices.

Sudden deaths and partnerships

Following the death of somebody in joint business ownership, the partnership will naturally dissolve. The portion of the business belonging to the deceased can then be bought by the remaining partner. If this isn’t financially viable for them, the portion of the business can potentially be bought by somebody else.

There are lots of grey areas that might arise in this situation. We always recommend addressing what will happen in the event of a death in any partnership contracts you draw up when starting or running the business.

Part-ownership in a business can be gifted to a successor either while the owner is still alive and deemed mentally fit, or through power of attorney. Of course, this should only be done when you are sure and ready.


Ecommerce accountancy services

Accounting for eCommerce sellers from £24.50 per month

Learn more

What about limited companies?

With limited companies, the owner’s business and personal finances are two separate entities. This means that the company itself takes on any debts or liability in the event of a death – not the deceased business owner.

Shares can then be sold or transferred with limited liability attached to the family of the deceased.

So, how can you make sure you’re prepared… just in case?

Learn more about our online accounting services. To talk to a member of the team, call 020 3355 4047, or use the live chat button. 

About The Author

Elizabeth Hughes

A content writer specialising in business, finance, software, and beyond. I'm a wordsmith with a penchant for puns and making complex subjects accessible. Learn more about Elizabeth.

More posts by this author
Inline Feedbacks
View all comments

Read more posts...

Architects and Tax

Architecture is a highly diverse sector when it comes to tax. It’s partly down to the type of businesses that carry out…

Read More

June 2022 Client of the Month: Manea Kella

This month we spoke to Adrian Manea, architect and director at Manea Kella, a London based RIBA Chartered architecture and interior design…

Read More

Succession Planning for Business Owners: What Comes Next?

When you own a business, it’s extremely normal to feel like you’re surviving one day to the next – ‘winging it’, as…

Read More
Back to Blog...

Confirm Transactions

The number of monthly transactions you have entered based on your turnover seem high. A transaction is one bookkeeping entry such as a sale, purchase, payment or receipt. Are you sure this is correct?

Yes, submit my quote
No, let me change it

Please contact our sales team if you’re unsure

VAT Returns

It is unlikely you will need this service, unless you are voluntarily registered for VAT.

Are you sure this is correct?

Yes, the business is VAT registered
No, let me change it

Call us on 020 3355 4047 if you’re not sure.


You only need this service if you want us to complete the bookkeeping on your behalf.

Would you prefer to complete your own bookkeeping?


Call us on 020 3355 4047 if you’re not sure.