If you died tomorrow, most Australian small businesses would stall within days, because nobody else can sign, access the bank, approve payroll or act as director. For a sole director and sole shareholder company, section 201F of the Corporations Act lets your personal representative appoint a new director, but only once your estate is being administered.

Nobody wants to write this article and nobody wants to read it. It is also, in my experience, the single largest unmanaged risk sitting inside a profitable Australian small business, and it costs nothing but a weekend to fix.

I am Mina Baselyous, a Certified Practising Accountant (CPA), Chartered Tax Advisor (CTA) and Registered Tax Agent in Melbourne. This article sets out what actually stops when the owner is suddenly not there, what the law allows, and the continuity file every business owner should have built before they need it.

What Actually Stops on Day One

Within about 48 hours the practical problems start, and almost none of them are about strategy. They are about access and authority: who can release a payment, who can authorise a wage run, who can sign a contract, who can talk to the bank, and who is legally the company. In most small businesses the answer to all five is one person.

The scale of the exposure is national. The Australian Small Business and Family Enterprise Ombudsman’s small business data portal records 2,741,087 actively trading small businesses as at 30 June 2026, with 97 per cent employing fewer than 20 people. The overwhelming majority of those are entirely dependent on one or two individuals.

In our experience working with established businesses, the ones that survive an unexpected loss are never the ones with the best strategy. They are the ones where a second person already had authority, and where somebody other than the owner knew where things were kept.

The Sole Director Problem

If your company has one director and that director is you, the company loses its capacity to act the moment you do. It cannot appoint a new director itself, because appointing directors is something the company does through its directors or members, and there are none available.

The Corporations Act 2001 anticipates this. Section 201F provides that where a person who is the only director and only shareholder of a proprietary company dies, or cannot manage the company because of mental incapacity, and a personal representative or trustee is appointed to administer their estate or property, that personal representative or trustee may appoint a person as director of the company. They may also appoint themselves.

Read that closely, because the protection has a gap in it. The power only arises once a personal representative has actually been appointed to administer the estate, and obtaining a grant of probate takes time, often months. During that window the company has no director, and in practice that means no lawful authority to trade, employ, pay or sign.

Note too that section 201F is written for the single director and single shareholder company. If your company has two directors, or your shares are held by a trust, different rules and different documents apply, which is one reason the corporate trustee question and your share structure matter more than most owners assume. Your solicitor should confirm how your constitution and shareholders agreement interact with all of this.

The Eight Things Nobody Else Can Do

Work through this list honestly and mark each one with a name other than your own. Most owners cannot fill more than two or three. Every blank is a point where the business stops, and every one of them can be addressed in advance without giving away control today.

• Authorise a payment from the business bank account. Second signatory or a second authorised user with an appropriate limit.
• Run and approve payroll. Staff still need to be paid on the 15th whatever else has happened.
• Act as director of the company. A second director, or a documented plan under section 201F.
• Act as trustee, if a trust is involved. A corporate trustee with a second director is far more robust than an individual trustee who has died.
• Lodge the BAS and deal with the ATO. Your registered tax agent can generally continue, which is one practical argument for using one.
• Access the systems. Accounting file, bank, email, payroll, job management, website, domain and phone system.
• Invoice customers and chase debtors. Revenue stops at the point invoicing stops, and the debtors ledger is usually the business’s largest asset.
• Tell people. Staff, key customers, suppliers, the bank and the landlord, in that order, with a prepared message rather than an improvised one.

The Continuity File

The deliverable is a single document, updated annually, that a competent person could pick up and run the business from for ninety days. It does not need to be elaborate. It needs to exist, and someone other than you needs to know where it is and how to open it.

• Entity map. Every company, trust and partnership, with ACNs, ABNs, directors, shareholders, trustees, appointors and where the original constitutions and deeds are held.
• Authority list. Who can sign what, at what limit, and which documents grant that authority.
• Access. A password manager with emergency access nominated to a named person, rather than a list in a drawer. Never store credentials in the continuity document itself.
• Key relationships. Accountant, solicitor, bookkeeper, bank manager, insurance broker, top ten customers and critical suppliers, with direct contact details.
• Money map. Bank accounts and facilities, loan balances and terms, leases, direct debits, and the recurring obligations that must keep being paid.
• Operational essentials. Where jobs are tracked, how quotes are priced, which customers are mid-project, and what is committed but not yet invoiced.
• The ninety day plan. Plain instructions: what to keep doing, what to pause, who to call first, and who is empowered to make decisions.

If you already have clean books and a monthly reporting rhythm, half of this exists already. That is a practical argument for the Virtual CFO model beyond the strategic one: an external party who knows your numbers, your structure and your obligations is a continuity asset in their own right.

The Money Side

Authority keeps the business operating. Funding keeps it solvent while it adjusts. A business that loses the person who generates most of its revenue will usually face a sharp revenue drop and unchanged fixed costs, at the same time as it needs to pay for a replacement and possibly buy out a departing owner’s family.

• Key person cover. Insurance held to give the business cash to survive the gap and recruit. Structuring it correctly, including who owns the policy and the tax treatment of proceeds, needs both financial and tax advice.
• Buy sell agreement. Where there is more than one owner, a documented and funded agreement about what happens to the departing owner’s equity, so the survivors are not in business with a grieving family and the family is not stuck holding unsaleable shares.
• Your own debt exposure. Personal guarantees given to the bank and the landlord do not disappear. Your estate may be exposed to them.
• Estate structure. How business assets pass, and whether a testamentary trust is appropriate, is a conversation for your solicitor with your accountant in the room.

The Division 7A Loan Nobody Thinks About

If you owe your company money through a shareholder loan account, that debt does not disappear when you do. It remains an asset of the company and a liability of your estate, and the complying loan obligations, including minimum yearly repayments, continue to apply.

This catches families badly, because the loan is often large, the estate is often illiquid, and missing a minimum yearly repayment can convert the shortfall into a deemed unfranked dividend at exactly the worst moment. If you carry a Division 7A loan, it belongs on the continuity file with a note about how it would be funded.

In practice, says Mina Baselyous (CPA, CTA, Registered Tax Agent), the shareholder loan is the item I most often find has never been discussed with the owner’s spouse. They know the business is worth something. They have no idea there is a debt attached to it in their partner’s name.

The same applies to how you take money out day to day. If your remuneration runs through a loan account rather than a documented wage or dividend, the position is harder for everyone to unwind later. Our guide to owner drawings versus paying yourself a real wage covers the alternatives.

Build It in a Weekend

You do not need a project. You need one document, four conversations and a calendar reminder. Most owners who do this tell us afterwards that the relief was disproportionate to the effort, largely because the risk had been sitting there unnamed for years.

• Saturday morning. Write the entity map, the authority list and the key relationships page. Two hours.
• Saturday afternoon. Set up emergency access in a password manager and nominate a person.
• Monday. Call your solicitor about the sole director position, your will and any shareholders agreement.
• Tuesday. Call your accountant about the loan account, the structure and who can act with the ATO.
• Wednesday. Call your broker about key person and buy sell funding.
• Then diarise it. Review it every year when you do your tax planning, because structures and people change.

There is a broader dividend here too. Every step that makes your business survivable without you also makes it more valuable and easier to sell, because a buyer is purchasing a business rather than your personal presence. Our guides to building a business that runs without you and selling your business approach the same work from the opportunity side rather than the risk side.

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