Why should you have a Successor Director?
The appointment of a successor director to a business is essential for the seamless succession to a director’s role in many family and private companies.
In most company constitutions, the shareholders appoint the directors. However, in many family and private companies there are either two directors who hold minimal shares each. Thus, if either director loses legal capacity or dies, the remaining director/s of the company will effectively control the ongoing affairs of the company and decide who will be paid the deceased’s death benefit if the company acts as trustee to a Self-Managed Support Fund. In this case, as each spouse has a 50% vote, a director who has lost capacity or died, will generally not have any legal right to have someone represent their interests.
Invigor8 Accountants and Advisors have a solution that will enable a director to nominate someone who takes their role in the event they are unable to hold a directorship. The appointment of a successor director is relevant if there are separate beneficiaries who will ultimately benefit upon the death of the director then having someone represent their interests if they lose their capacity is advisable to ensure their benefits are dealt with in the most appropriate manner.