Legal Question in Wills and Trusts in Pennsylvania

Will and S Corp Status
Does the death of the principal share holder of an s corporation dissolve the corp? Does filing bankruptcy dissolve the corporation? The co-owner of a family business recently passed away and a will states that his interest is bequested to his son....making him a partner of the surving wife. All that exist with the business is debt. Does the son now assume 50% of that debt. If the wife plans to sell the business is the son entitled to 50% of the profit? an the son stop the sale of this business? The will was written a few years before the principal shareholder of the s corporation filed bankruptcy, so is this even valid?

Asked on 10/28/04, 4:32 pm

Mark Johns Mark Johns, Esquire

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Re: Will and S Corp Status

1.Death of shareholder does not disolve s-corp.

2. If the Corp. Declared a Chapter 7 Liquidation then it is disolved.

3. Son does not assume debts

4. If will is probated son would be entitlted to whatever precentage ownership interest was bequeathed to him.

5. It depends if the shares in the corp were given up in the bankruptcy or retained.

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Answered on 10/28/04, 5:57 pm

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