What Happens If A Business Owner Dies And Leaves A Warehouse Full Of Unsold Inventory?
Many Florida residents dream of owning and running their own business. But what these people often fail to consider is the need for business succession planning. That is, what will happen to their business if they become incapacitated or die unexpectedly?
If a business is structured as a corporation, then as far as the law is concerned the business continues even after the owner’s death, even if they were the sole shareholder. The shares of the corporation simply transfer to the heirs or beneficiaries of the prior owner’s estate. A sole proprietorship, however, is a much trickier situation. A sole proprietor has no legal separation from their business. Effectively when the owner dies, so does their business. Of course, that can still leave quite a mess for the estate or family members to clean up.
Volunteers Help Dallas Used Computer Store Liquidate 38,000 Square Foot Warehouse Following Owner’s Death
A recent story from the Dallas-Fort Worth area offers a cautionary tale of what can happen when an owner fails to engage in prior business succession planning. In 2019, a popular YouTube channel called LGR featured the story of Computer Reset, a Dallas-based computer repair store. Computer Reset had been owned and operated by a man since the 1970s. Over the decades, the owner managed to acquire so many used computers that he managed to completely fill his storefront and its attached 38,000 square-foot warehouse.
In May 2019, the owner suffered an injury that prevented him from continuing to work. He later passed away. But this still left a giant warehouse filled with vintage computer equipment. Over the past three years, the owner’s daughter has been working with a group of volunteers from Dallas’ retro computer hobbyist community to liquidate the contents of the warehouse. The LGR channel posted a follow-up video about this process in February 2022. Currently, the volunteers run weekend liquidation events where for a flat fee of $150, interested persons can effectively spend a few hours in the warehouse and take home any items they wish.
Speak with a Florida Business Succession Planning Attorney Today
This may sound like just a quirky news story. But it actually serves as a good illustration of what can happen when a business owner fails to think about how to sell or wind-down their business when they are no longer able to run it. Indeed, the last thing most small business owners want is to burden their family with having to liquidate an entire warehouse of unsold inventory or deal with business creditors. That is why if you do own a business, you need to seriously consider your succession planning options. Do you want the business to continue after your death? Is there a family member or key employee willing (and able) to purchase the business? Should you incorporate your sole proprietorship to ensure the doors stay open after you are gone?
If you need legal advice or assistance in answering these questions, it is best to consult with a qualified St. Petersburg business succession lawyer. Contact Legacy Protection Lawyers, LLP, today to schedule an initial consultation with a member of our Florida estate planning team.