Consider this situation...
You are the sole shareholder and officer of the company that is your primary business vehicle.
You have a Will and it is all up-to-date so when you die you should be protected – right? As you understand it your shares in the company will pass under the terms of your Will to your nominated beneficiaries. When the shares are transferred to your beneficiaries they will then have the right to appoint new company officers and the company will run its business under the direction of these new company officers.
However even with the best Will in the world you can expect long delays between the date of your death and the time when your executor can obtain a grant of probate of your Will. Only once the grant of probate is obtained can your executor lawfully begin to run your company. At best it takes weeks to obtain the grant of probate. It’s more likely to be months.
In the meantime nothing happens. The company’s bills, including wages and salaries and liabilities such as BAS and other tax won’t get paid as there is no one who can operate the company’s accounts. Vital business contracts such as leases and deeds don’t get signed. Your beneficiaries will be at the mercy of the banks.
There is a solution – the law allows the company to appoint an attorney (power of attorney - POA). By appointing an attorney for the company the usual business of the company is able to be carried on even after your death.