Why should an active and resigned company directorship search be carried out?
As a personal representative, you wouldn’t knowingly administer an estate that has large debts. Without carrying out the proper enhanced due diligence checks, you are exposing yourself to this risk during estate administration. An active or resigned company directorship search will inform a personal representative of any current and previous appointments as a director, as well as the trading status of each registered company.
This information cannot be identified solely from bank accounts, nor from paperwork, as it is possible the deceased will have resigned or never worked as an employee of the company. Instead, they may have shares, receive dividends, have invested in a pension scheme, or have a private pension; all assets and incomes that need to be identified.
What are the risks of not carrying out this search?
As a Personal Representative you are responsible for an estate ‘in perpetuity’ and have a responsibility to confirm that beneficiaries are receiving what is owed to them. Executors must locate all the financial assets including those from companies at which the deceased was an active or resigned company director. Assets may be uncovered that are owed to the deceased from their time as company director. However, there is also the possibility of them being liable for the any debts from this time, thus putting a personal representative at risk.
Case Study –
A solicitor had applied for a probate grant for a deceased’s estate. They had gone through the process of finding the accounts, submitted the request to the court to be the personal representative and the grant was accepted. However, it was later found out that the deceased was a company director at multiple companies. They had borrowed upwards of £700,000, which was not at the disposal of the personal representative to pay back. This large amount of debt caused the estate to become insolvent, putting liability and risk on the personal representative.
How can Estatesearch help mitigate this risk?
While finding this debt can be difficult, Estatesearch offer an active and resigned company directorship search as part of our wider Financial Profile Service; an award-winning financial asset search helping identify assets and liabilities in the estate. Our single comprehensive search helps incorporate important searches all into a single service. Helping you more efficiently conduct comprehensive checks and satisfy estate due diligence, providing better client service while mitigating against potential risks and any future liabilities.
Our company directorship search differs to many as it looks not only at active directorships but resigned directorships too, where possible debts may have accrued. This report will give information about whether the estate is insolvent and therefore whether the solicitor should proceed with a probate grant, or whether it is best left to the bank and creditors to handle.
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