If the deceased was a business owner, notify business partners, employees, clients, and vendors as soon as possible. Delays may impact operations, payroll, or customer communications. If the business is still active, begin collecting contact details and access information for future follow-up.
Frequently Asked Questions
Process
What are the first steps if the deceased owned a business?
Immediately secure the business premises and assets, preserve financial records, and notify key employees. Determine who has authority to operate (check the operating agreement, partnership agreement, or corporate bylaws). Contact the business attorney and accountant within 24-48 hours. If there are employees, payroll must continue on schedule—failure to pay employees on time violates labor law.
Legal
Who has authority to run the business after the owner dies?
This depends on the business structure. For sole proprietorships, the executor of the estate takes over. For LLCs, the operating agreement dictates succession—often a remaining member or a designated successor. For corporations, the board of directors continues to manage. For partnerships, the partnership agreement controls. If no succession plan exists, the probate court will appoint someone.
What happens to employees and payroll obligations?
Employees must continue to be paid on the regular schedule regardless of the owner's death. The executor or authorized person must ensure payroll taxes are filed and paid (missing payroll tax deadlines carries severe IRS penalties). Notify employees promptly but avoid premature announcements about the business's future until you have a plan. Check if the deceased had employment practices liability insurance.
Costs
Did the deceased have key person insurance?
Key person (or key man) insurance is a life insurance policy a business takes out on an essential owner or employee. Check with the business's insurance agent, accountant, or attorney. If a policy exists, file the claim immediately—these funds can keep the business operating during the transition. Payouts typically go to the business entity, not to family members, and can be used for any business purpose.