When a business owner dies, practical problems start immediately, long before probate is granted. A sole trader’s bank account, or any account in a personal name, is frozen the moment the bank hears of the death, stopping payments to staff and suppliers overnight. A limited company’s account does not freeze in the same way, but still needs someone with proper signatory authority to run it, which is why a single-director, single-signatory company can face the same problem in practice.
Payroll obligations to HMRC continue regardless, so it matters who else can run payroll and pay suppliers without the owner’s sign-off. Contracts generally continue, but personal guarantees become a liability of the estate, and supplier relationships can unravel quickly if nobody is available to communicate.
Business Relief can reduce inheritance tax on qualifying trading assets, with a combined £2.5 million cap alongside Agricultural Relief from April 2026. The best protection is practical: a bank mandate allowing more than one signatory, clear notes on who runs payroll, and a will letting executors keep the business trading while probate proceeds.