Abstract
English law tends to keep company law and succession separate. Family problems may be resolved outside companies, using testamentary freedoms, flexibility, and managerial approaches within a trust. Shareholders can be treated equally regardless of family status. Continental difficulties, which arise from fixed compulsory family portions on inheritance, may not intrude into English family business quite as the conference questionnaire contemplates.
English law has a functionally similar concern for family welfare to continental countries in a European continuum. France insists on compulsory shares for families but then provides arrangements to facilitate business. England has testamentary freedom but restricts this for statutory provision for family and dependants. The differences are, however structural. Consequently, international tolerance is essential. Testamentary freedom is inherently tolerant.
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Notes
- 1.
- 2.
BIS (2012), p. 93.
- 3.
From Stock-Market data for 2009.
- 4.
BIS (2012), p. 94.
- 5.
A national public registry for all companies.
- 6.
From Oxford Economics (2011b).
- 7.
EU Commission (2009).
- 8.
From HM Government (2012) Chapter 2, Family Matters, Tables 12.3–6 and 9. This included partial intestacy, where the will did not cover everything.
- 9.
- 10.
Ibid.
- 11.
Taxation of Chargeable Assets Act 1992, ss 169H-169S.
- 12.
Ibid. s 169N.
- 13.
The Inheritance (Family Provision) Act 1938, superceded by the Inheritance (Provision for Family and Dependants) Act 1975. See Sect. 2.3.1.
- 14.
See Kerridge (2009) for a brief history.
- 15.
See Sect. 5.3, for difficulties with contractual gifts in England.
- 16.
Regulation No 650/2012 of the European Parliament and of the Council of 4th July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments on matters of succession and on the creation of a European Certificate of Succession.
- 17.
This is clear from the Yearbook of the Society of Trust and Estate Practitioners (STEP 2013) for France and Spain.
- 18.
Ibid.
- 19.
Apparent from the whole of this chapter, but particularly explained in Sect. 2.
- 20.
Law Commission (2013) Part II.
- 21.
See below note 26 for their recent report and Sect. 2.3.1.for an example of their reforms.
- 22.
Ministry of Justice (2012) Table 12.9, although the figures given are for 2000–2001. These figures will not record small estates of less than £5,000 and include cases where there is no will. They will not show which child inherits.
- 23.
Inheritance Act ss. 17 and 142. Variation is possible by the Court if there are beneficiaries under the age of 18 or otherwise lacking capacity with the approval of the court under the Variation of Trusts Act 1958.
- 24.
The Economist (2013). Child support also involves requirements for non-custodial spouses and for the state to support children.
- 25.
Taking effect for deaths after 1st October 2014.
- 26.
The Law Commission (2013).
- 27.
Under the Civil Partnerships Act 2004, currently only applying to single sex partnerships.
- 28.
The Inheritance and Trustees Powers Act 2014, s 4.
- 29.
The rule in Saunders v Vaultier (1841) 4 Beav 115, provided they are of full age and absolutely entitled between them to all the property.
- 30.
Because of the rule against perpetuities. The Perpetuities and Accumulations Act 2009, s. 5, limited the period within which interests in a trust must “vest” within 125 years (that is, the beneficiary must exist and be identified or identifable). A French company can last 99 years.
- 31.
Charities Act 2011, s 2(1)(b) and s 4.
- 32.
From a non-exhaustive list in ibid. s 3.
- 33.
Charities must be registered and are accountable to the Charity Commission, an independent supervisory body.
- 34.
- 35.
Inheritance (Provision for Family and Dependents) Act 1975, s. 1(a).
- 36.
Ibid., s 1(b). For former civil partners to qualify, they should not have been in a former marriage or relationship.
- 37.
Ibid., ss 1(c) and 1(d).
- 38.
Ibid., ss 1A and 1B.
- 39.
See the short history in chapter 8 of Kerridge (2009).
- 40.
- 41.
The test for whether dependency exists was adjusted by the Inheritance and Trustees Act 2014, s 6 and Schedule 1, to be more favourable to dependents.
- 42.
Re Hancock [1998] 2 FLR 346 and Espinosa v Burke [1999] 1 FLR 747.
- 43.
Under the Interpretation Act 1978, s 6, the masculine term includes the feminine, and vice versa, so women can claim.
- 44.
Inheritance (Provision for Family and Dependents) Act 1975, s. 1(2)(b).
- 45.
Re Coventry [1980] Ch 461.
- 46.
See the first para. of Sect. 2.3 for the generosity of divorce provision.
- 47.
The Inheritance (Provision for Family and Dependents) Act 1975, s 1(2)(a) and (aa).
- 48.
Defined in s 55(1)(x) Administration of Estates Act 1925 as amended by s 3 of the Inheritance and Trustees Powers Act 2014.
- 49.
Ibid.
- 50.
From the tables under s. 46(1) of the Administration of Estates Act 1925, as amended.
- 51.
Law Commission (2013) para 2.6.
- 52.
Ibid. Property passing to the State as bona vacantia is used for the public good.
- 53.
The term includes the memorandum and articles of association plus other documents, Companies Act 2006, s. 17.
- 54.
Companies (Model Articles) Regulations 2008.
- 55.
Agricultural Holdings Act 1985, Part IV.
- 56.
DTI (2002) para. 1.6.
- 57.
DTI (2005) from the Summary.
- 58.
Also in the Companies (Model Articles) Regulations 2008.
- 59.
Mental Capacity Act 2005, ss 9–15.
- 60.
Part of the High Court.
- 61.
All from their website: HM.gov.UK, Contact the Court of Protection,H.M. Government. Undated. https://www.gov.uk/court-of-protection. Accessed 29 05 2015
- 62.
‘Executrix’ if a woman.
- 63.
‘Administratrix’ if a woman.
- 64.
Kerridge (2009) has an extensive account of this process.
- 65.
See Hayton (2003) for an introductory account of trusts.
- 66.
Liability is limited to the assets administered, unless there is negligence or wrongdoing.
- 67.
In this case the duty is to shareholders as a whole, not to individuals as for a trust.
- 68.
See Bristol and West Building Society v Mothew [1998] Ch 1. for an exposition of trustees duties.
- 69.
This can make it harder to sue.
- 70.
This power may be implied but can be excluded or reinforced by will.
- 71.
Trusts of Land and Appointment of Trustees Act 1996, s 11.
- 72.
In the Companies (Trading Disclosures) Regulations 2008, as amended.
- 73.
This has some relationship to the Roman Law commenda and the French société en commandite.
- 74.
- 75.
Since 1900 this was thought appropriate rather than liability resting on individual heirs. See Peel and Treitel (2011) for an account of the logic of this.
- 76.
The Partnership Act 1890, s 24.
- 77.
Limited Liability Partnerships Act, 2000, ss 1(4) and s 74, and The Insolvency Act 1986, s 214A, by order of the Court.
- 78.
Limited Liability Partnerships Act 2000, s 7(1).
- 79.
Limited Liability Partnerships Regulations 2001, reg 7(8).
- 80.
Here, limited liability means the shareholder only loses the value of the shares on winding-up.
- 81.
Weston’s Case, also known as re Smith Knight and Co (1868) LR 4 CH App 20.
- 82.
Directive 2001/34/EC, of the European Parliament and of the Council of 28 May 2001 on the admission of securities to official stock exchange listing and on information to be published on those securities [2001] art 46(1).
- 83.
Partnerships (4.3.2) do not have constitutions, but partnership agreements.
- 84.
See the beginning of Sect. 4.
- 85.
Nonetheless a register of beneficiaries of shares has been suggested by the government.
- 86.
Companies Act 2006, s 251 defines a shadow director as ‘… a person in accordance with whose directions or instructions the directors of the company are accustomed to act.’ Examples of impositions of duties and offences are ss 16(6), 162, and 170.
- 87.
Examples of impositions of duties and offences are ibid., ss 16(6), 162, and 170.
- 88.
See also Sect. 2.3, fourth paragraph.
- 89.
By the rule in Saunders v Vautier(1841) EWHC Ch J82 or the Variation of Trusts Act 1958.
- 90.
A definition by Frederick Pollock, some of whose work is described in Sect. 4.3.2.
- 91.
For example, a contract might specifically provide to be effective after death. Some contracts class as creating proprietary rights.
- 92.
Although inheritance tax would still have to be paid if due.
- 93.
This is within a specified number of years before death, according to the circumstances.
- 94.
See the final paragraph of Sect. 1.2 for an example.
- 95.
- 96.
- 97.
There is an extensive exposition of this in Baden’s Deed Trusts (No 1)(also known as McPhail v Doulton) [1970] AC 424 and Baden’s Deed Trusts [1973] (No 2) Ch 9.
- 98.
Law Commission (2013).
- 99.
Note 29.
- 100.
An integral part of the general analysis in chapter 1.
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Ball, J. (2015). The Interaction Between Company Law and the Law of Succession in England. In: Kalss, S. (eds) Company Law and the Law of Succession. Ius Comparatum - Global Studies in Comparative Law, vol 5. Springer, Cham. https://doi.org/10.1007/978-3-319-18011-3_5
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