If your parent was passionate about the California business he or she built from the ground up, you likely spent many dinners and holidays hearing stories about clients or jobs that made your loved one particularly proud of the work he or she did. Your parent had a knack for the industry he or she chose, and whether you shared this interest or took a different path, you may have given little thought to what would happen to the business if your parent died.
Dealing with a small business after the death of its sole proprietor may be a complex legal matter as well as an emotional one. If you have decided to try to keep your parent’s business operating, you must take the appropriate legal steps to protect the business as it is and learn what you must do to transfer the business to your name.
What happens next?
Every small business has its unique flair, and along with the personality your parent brought to the company, he or she also had financial and legal obligations to meet. If your parent made no plans for the succession of the business, you may be dealing with employees who are concerned about their jobs and clients who wonder if their contracts are still valid. You may also have the following critical matters to resolve as quickly as possible:
- Your immediate concern will be to protect the business and its assets during this transitional time.
- Depending on the industry, you may have to obtain the appropriate licensing or transfer your parent’s licenses to your name.
- Any debts your parent owed to vendors or lenders will likely become your responsibility if you assume ownership of the business.
- You may have to deal with franchising matters if your parent’s business is a licensed brand.
- You must look at your own financial and personal situation to determine if you can take on the responsibility of an established business.
You may be spending a great deal of time assuring your customers and employees of your ability and determination to keep the business running with the same dedication your parent gave. You may have more success with this if you have a network of resources to advise you along the way. One helpful advocate will be a skilled attorney who can assist you through the probate process and guide you in your efforts to keep your parent’s business running efficiently.