2026-08-31 · 20 min read

What happens to a limited company when the director dies

What happens to a limited company when the director dies: it survives, but nobody can sign, pay or file until a new director is appointed. Who can appoint one.

A limited company does not die with its director. Under section 16 of the Companies Act 2006 it stays a separate legal person, so its contracts, debts, assets and Companies House record continue untouched; what stops is its capacity to act, because section 154 requires a private company to keep at least one director and until a replacement is appointed there may be nobody with authority to sign, pay or file. Which route reopens that authority — a surviving board, a shareholders' resolution, a written notice from the executors, or a High Court application — is settled by one document most owners have never read: the company's articles of association.

Does the company itself stop existing?#

No. On registration the subscribers and later members "are a body corporate by the name stated in the certificate of incorporation", and that body corporate "is capable of exercising all the functions of an incorporated company" (s.16). Nothing in that formulation depends on any individual staying alive.

The duties attached to that body corporate survive with it. A private company must have at least one director (s.154), so a company sitting with no directors is in breach from day one. Under s.156 the Secretary of State can direct the company to comply within a period that "must be not less than one month or more than three months after the date on which the direction is given". Failing that direction is an offence by the company and every officer in default, carrying a fine up to level 5 on the standard scale plus a daily default fine for continued contravention.

What happens if the company has other directors?#

Nothing structural breaks: the company never drops below the s.154 minimum. The surviving directors carry on and can appoint a replacement by board decision under Model Article 17(1)(b), or the shareholders can appoint by ordinary resolution under 17(1)(a).

There is a quorum wrinkle for two-director companies, and it has a built-in answer. Model Article 11(2) says the quorum for directors' meetings "must never be less than two, and unless otherwise fixed it is two", and the single-director exception in Model Article 7(2) applies only where the company "only has one director" and no provision of the articles requires more. A board of two reduced to one is therefore below quorum. Model Article 11(3) is the release valve: where the total number of directors is less than the quorum, the directors "must not take any decision other than a decision — (a) to appoint further directors, or (b) to call a general meeting so as to enable the shareholders to appoint further directors."

So the surviving director can appoint a replacement. What they cannot do is approve a payment, a contract or a share transfer until the board is back to quorum. Bespoke articles can fix a different quorum or strip the exception, so read them before relying on this. Either way, Companies House must be told of the change within 14 days, using form TM01 to record the termination.

What if the sole director dies but shareholders survive?#

Companies House puts it plainly: "When a sole director dies and there are surviving shareholders or members, they can hold a shareholders meeting to appoint a new director" (Companies House blog). The shareholders pass an ordinary resolution under Model Article 17(1)(a) and the company files the changes. No court, no probate, days rather than months.

What if the sole director was also the sole shareholder?#

Both ordinary routes in Article 17(1) are now closed: there is no board left to decide and no shareholder left to vote. The Model Articles anticipate exactly this. Model Article 17(2) says: "In any case where, as a result of death, the company has no shareholders and no directors, the personal representatives of the last shareholder to have died have the right, by notice in writing, to appoint a person to be a director."

Companies House confirms the same reading: "If the deceased director is the only shareholder, and the company has been incorporated under the Companies Act 2006, the model articles of association allow the personal representatives of the deceased officer to appoint a new director." Solicitors Debenhams Ottaway describe the same mechanism: the right arises under article 17(2) and is exercised by notice in writing.

Why can't the executors simply vote the shares themselves?#

Because the shares reach them in a restricted form. Model Article 27(1) provides that if title to a share passes to a transmittee, "the company may only recognise the transmittee as having any title to that share", and 27(2)(b) gives that transmittee "the same rights as the holder had". Then 27(3) takes the important one back: transmittees "do not have the right to attend or vote at a general meeting, or agree to a proposed written resolution ... unless they become the holders of those shares."

So the executors hold the shares but cannot vote them until they are registered as members, and registering them as members normally requires a director to approve the transfer. With no director, that loop does not close on its own. Article 17(2) exists to cut it, which is why its absence costs a High Court fee and a hearing.

What if the articles are pre-2009 Table A or bespoke?#

This is where the model-articles answer runs out. The Companies (Model Articles) Regulations 2008 came into force on 1 October 2009, and s.20 applies the model articles "as in force at the date on which the company is registered". A company incorporated before October 2009, or one with bespoke articles, will very likely not have Article 17(2). Companies House's own caveat is blunt: for companies incorporated before that date, and companies that have not adopted the model articles, "you should seek professional advice about your options" (Companies House).

1985 Table A "does not contain provisions analogous to article 17(2) of the model articles" (Debenhams Ottaway). The result is a closed loop: no shareholder can appoint a director, and no director can register the personal representatives as shareholders. The way out is a court application under s.125 of the Companies Act 2006 to rectify the register of members, which can be made by "the person aggrieved, or any member of the company, or the company", and which lets the court decide any question relating to title to membership.

That is precisely what happened in Kings Court Trust Ltd v Lancashire Cleaning Services Ltd [2017] EWHC 1094 (Ch). The sole director and sole shareholder, Mr Pilling, died on 28 February 2017. The company had been incorporated on 30 June 2006 and had adopted the 1985 Table A regulations, so there was no Article 17(2) to use. The executors applied under s.125 to substitute their names on the register so they could then pass a written resolution appointing a director. Probate had not been granted. The urgency was operational, not legal: NatWest had frozen the company's account with effect from 7 April, staff wages were due on 13 April, and there was an outstanding VAT liability. The Part 8 claim form was issued on 11 April 2017 and heard the following day.

The four scenarios, side by side#

Situation	Who can appoint a director	Mechanism	What it turns on
Other directors survive	The remaining board, or the shareholders	Board decision or ordinary resolution (MA 17(1))	Quorum under MA 11 — but MA 11(3) lets a below-quorum board appoint
Sole director, other shareholders survive	The surviving shareholders	Shareholders' meeting, ordinary resolution (Companies House)	Only whether the surviving shareholders can be convened
Sole director and sole shareholder, Model Articles	The personal representatives	Notice in writing (MA 17(2))	Whether the filed articles actually contain 17(2)
Sole director and sole shareholder, Table A or bespoke articles	Nobody, until the court acts	Rectification of the register (s.125), as in Kings Court Trust	Incorporation date and the articles on file

Across all four, add one more variable: whether there is a will. With one, the named executors can act on death. Without one, "the closest living relative can apply" for the grant instead, which adds weeks before anyone holds authority at all (GOV.UK).

Why does the money stop even though the company legally continues?#

Because the bank mandate is tied to the person, not the company. The frozen NatWest account in Kings Court Trust is why a High Court hearing was arranged the day after the claim was issued: the 13 April payroll did not wait for probate. GOV.UK's own advice compounds the pause: "You should not make any financial plans or put property on the market until you've got probate."

Filing is the second choke point. Companies House sends the authentication code needed for online filing by post to the company's registered office, and "it can take up to 10 working days to arrive". Phoning will not shortcut it: "We cannot send your company authentication code by email or tell you the code over the phone" (GOV.UK). If the registered office is inaccessible — a closed serviced office, a home nobody can enter — there is a service to request the code to a director's home address instead.

On liabilities, HMRC's internal manual records that "[c]ompany directors are not usually liable personally for company debts", that "[a] company may be dissolved on the death of a director" with certain assets then passing to the Crown as bona vacantia, and that recovery action "must be reasonable and proportionate in the circumstances" (DMBM530330).

What does Companies House still expect while all this is unresolved?#

Everything it expected before. "Company affairs such as filing accounts on time still need to be carried out after an officer has passed away," Companies House says, adding that its staff were trained by Cruse Bereavement Care and that it works to ensure timescales are reasonable (Companies House).

Obligation	Deadline	What non-compliance costs
Report a change of directors	14 days (GOV.UK)	Company in breach of its reporting duty
Annual accounts	Filing deadline unchanged by the death	£150 up to 1 month late, £375 up to 3, £750 up to 6, £1,500 beyond 6, doubled if accounts are late in 2 successive financial years (GOV.UK)
Confirmation statement	At least once every 12 months, filed up to 14 days after the review period ends	"You can be fined up to £5,000 and your company may be struck off if you do not file your confirmation statement" (GOV.UK)
Company Tax Return	12 months after the accounting period ends	£200 at 1 day late and another £200 at 3 months, rising to £1,000 each if the return is late 3 times in a row, plus 10% of unpaid tax at 6 months and a further 10% at 12 (GOV.UK)

Missing accounts or confirmation statements is not only a fee. Companies House states: "Not filing your accounts or confirmation statements is a criminal offence. Directors or LLP designated members could be personally fined for this in the criminal courts" (GOV.UK).

Silence has its own consequence. Under s.1000 the registrar may strike off a company it has reasonable cause to believe is not carrying on business or in operation: a first letter, a second letter if there is no reply, then a Gazette notice giving two months before the company is struck off and dissolved. The registrar may form that belief where expected documents have not been received "or if mail that the registrar has sent to a company's registered office is returned undelivered" (GOV.UK) — the exact position when the only person who opened the post has died. On dissolution, assets pass to the Crown as bona vacantia and "[t]he company's bank account will be frozen. The account will not be able to receive payments and any money in the account will pass to the Crown" (GOV.UK). Restoration must generally be applied for within 6 years of dissolution.

How does Companies House identity verification change the appointment now?#

From 18 November 2025, identity verification became a legal requirement for directors and people with significant control. New directors "will need to verify their identity to incorporate a company or be appointed to an existing company" (Companies House), which lands directly on an executor appointing a replacement. Verification through GOV.UK One Login "is free and can be completed quickly online" — via an app, a browser, or if directed, the Post Office — with an Authorised Corporate Service Provider as the alternative route. Directors already in post confirm their verification when they file their next confirmation statement, during a 12-month transition period.

Practically: budget a day for the incoming director to verify and obtain a personal code, before anyone assumes the appointment can be filed the same afternoon as the resolution.

How long does probate take?#

"You'll usually get the grant of probate or letters of administration within 12 weeks of submitting your application. It can take longer if you need to provide additional information" (GOV.UK).

Reported averages have run shorter than that ceiling. A government news release in February 2025 put the average wait at "just over four weeks" on December 2024 figures, with around 80% of applications made online and digital applications averaging just over two weeks (GOV.UK news). Treat that as a dated snapshot rather than a forecast for your own application, and plan payroll and supplier cover against the 12-week guidance.

Where there is no will, the closest living relative applies for letters of administration, which adds time before anyone even has standing to deal with the shares.

What should the executor do, in order?#

Pull the current articles from the Companies House register and check the incorporation date. Anything before 1 October 2009 needs a line-by-line read for an Article 17(2) equivalent.
If Model Articles apply and the deceased was sole director and sole shareholder, prepare the notice in writing appointing a director under MA 17(2).
If other shareholders survive, convene a meeting and pass an ordinary resolution instead.
If a co-director survives but the board is below quorum, use MA 11(3) — appoint further directors, or call a general meeting, and take no other board decision until quorum is restored.
If the articles are Table A or bespoke, take advice on a s.125 rectification application in the first week, not once payroll has already bounced.
Have the incoming director complete Companies House identity verification and obtain a personal code.
Locate or request the company authentication code, allowing up to 10 working days by post, or use the home-address request service.
File TM01 for the terminated appointment and notify the new appointment, keeping inside the 14-day window.
Tell the bank and start the mandate change, with the grant of probate or letters of administration in hand.
Diarise the next accounts, confirmation statement and Company Tax Return deadlines. None of them moved.

A company that genuinely has nobody to take it over can be wound up or struck off deliberately. Doing nothing is not that choice: if filings stop and post goes unanswered, the registrar can start the s.1000 process anyway, and dissolution on those terms sends whatever is left in the bank account to the Crown rather than to the estate.

What is different in Australia and South Africa?#

Neither regime imports Article 17(2). They reach comparable destinations through different statutes and different deadlines.

Australia. Section 201F of the Corporations Act 2001 covers single director and single shareholder proprietary companies directly: where a person who is the only director and only shareholder dies and a personal representative or trustee is appointed to administer their estate, that representative may appoint a person as director, and may appoint themselves. ASIC states it plainly: "If the sole director and sole shareholder has a valid will, the appointment of the executor can occur more efficiently. This allows a new director to be appointed quickly" (ASIC). Without a will, ASIC warns, someone "will have to apply to the local Supreme Court for permission to manage the estate and to appoint a new director to the company", and "[i]t could take some time, possibly several months, for the Supreme Court to grant the letters of administration". Officeholder changes go to ASIC within 28 days, not the UK's 14, on the "Change to company details (484)" form.

South Africa. Under the Companies Act 71 of 2008 the board of a private company must comprise at least one director (s.66(2)(a)), and a person ceases to hold office as a director — creating a vacancy on the board — when that person resigns or dies (s.70(1)(a)). A private company whose sole director has died is therefore left without a board until a replacement is in place. Director changes are notified through the CIPC director amendment process, which asks for filing within 10 business days of a director ceasing to be a director — the tightest of the three deadlines here.

If the entity is a US LLC rather than a UK limited company, the mechanics turn on the operating agreement and state statute instead of articles; that is covered in what happens to a US LLC when its owner dies.

What should a sole director put in place now?#

Companies House titles its own guidance how to prepare for the death of a director, which tells you how routine the failure is. Five items cover it:

Read the articles this week. Confirm whether Article 17(2) is actually there. If the company predates 1 October 2009 or uses bespoke articles, take advice on adopting appropriate alternative director provisions (Debenhams Ottaway).
Consider appointing a second director. It keeps s.154 satisfied on the day of death and removes the deadlock without anyone applying to a court.
Make a will. It decides whether the successor is an executor acting in weeks or a relative waiting on letters of administration.
Write down where things live: the authentication code, the registered office post arrangements, the bank mandate, payroll dates and provider, client accounts, and who to call first. The code cannot be emailed or read out over the phone, so an executor without it starts a 10-working-day clock before filing anything online.
Name the person who will receive that record, and make sure they know it exists.

That last item is where most plans quietly fail: the instructions exist, but only in one head or one drawer. Proceedly is built for that gap. You answer a check-in on a schedule; if it goes unanswered past a grace window, a person you name confirms — or, on a paid plan, it releases automatically — before your encrypted handoff plan reaches the people who depend on you. It holds the instructions and where the keys live, never the passwords themselves.

FAQ#

Can a limited company legally exist with no directors?#

It continues to exist as a body corporate under s.16, but it is in breach of s.154 from the moment the last director goes. The Secretary of State can direct compliance within a window of not less than one month and not more than three under s.156, and failing that direction is an offence by the company and every officer in default.

Do the executors need a grant of probate before appointing a director?#

Article 17(2) gives the right to the personal representatives by notice in writing. In practice the grant is what banks and third parties rely on, and GOV.UK advises making no financial plans until probate is granted. In Kings Court Trust probate had not been granted when the executors issued their Part 8 claim on 11 April 2017.

If one of two directors dies, can the survivor appoint a replacement alone?#

Under the Model Articles, yes. A board below its quorum "must not take any decision other than a decision — (a) to appoint further directors, or (b) to call a general meeting so as to enable the shareholders to appoint further directors" (MA 11(3)). Appointing is one of the two things still permitted. Bespoke articles may fix a different quorum, so check the filed set.

How long does the company have before Companies House starts strike-off?#

There is no fixed grace period. The registrar acts on reasonable cause to believe the company is not carrying on business or in operation, including where expected filings are missing or post is returned undelivered, then runs the s.1000 sequence of two letters and a Gazette notice giving two months before dissolution.

Does the deceased director's estate become liable for company debts?#

HMRC's manual records that company directors are not usually personally liable for company debts, while noting that recovery action must be reasonable and proportionate in the circumstances (DMBM530330).

What happens to money in the company bank account if the company is dissolved?#

The account is frozen, cannot receive payments, and any money in it passes to the Crown as bona vacantia (GOV.UK). Restoration must generally be applied for within 6 years of dissolution.

Does the new identity verification regime apply to the replacement director?#

Yes. Since 18 November 2025 new directors need to verify their identity to be appointed to an existing company, free through GOV.UK One Login or via an Authorised Corporate Service Provider (Companies House).