When the member of a farming CC dies

01 July 2020 | Byvoegsels
When the member of a Close Corporation that owns a farm dies, the legal consequences in the deceased estate are different from what happens when an individual who owns a farm dies.

The main difference is that the farm is not an asset of the estate, but the member’s interest of the corporation is the asset in the estate. Thus in the latter case, the corporation remains the registered owner of the farm and the corporation does not come to an end because the member has died. In other words the farming activities of the corporation, as well as it’s bank accounts can continue.

In terms of a Last Will and Testament the member’s interest in the corporation may be bequeathed by the testator or testatrix to a person and where there is no Will, the intestate beneficiaries can enter into a Redistribution Agreement whereby some beneficiaries inherit the member’s interest. In neither of these two instances will the Estate be required to obtain a Waiver Certificate from the Government.

A non-Namibian may also inherit a farm either in terms of a Will or in terms of the Laws of Intestacy.

Should the Estate want to sell the member’s interest of the deceased, a Waiver Certificate must be obtained.



Some related points which are useful to know are the following:

When you bequeath your farm to a Close Corporation or a Company in your Will, effect can only be given to the terms of the Will, after the Estate has obtained a Waiver Certificate from the Government.

In other words the pre-emptive right of Government in the case where agricultural land is bequeathed in terms of a Will, only applies where the heir or legatee is a Company or a Close Corporation.

An owner of a farm may give a usufruct over the farm to his or her spouse, child, parent or sibling. If the usufruct is given to anyone else, the owner will have to obtain a Waiver Certificate from the Government, before the usufruct can be ceded.

As I have discussed in a previous article, whenever the estate wants to sell a portion of the member’s interest in the Corporation, a Waiver Certificate must first be obtained from Government.

Question from a reader:

The farm is registered in the name of a Corporation with two members: the son has a 30 % share of the member’s interest and the father 70 %, with a lifelong usufruct registered in favour of the father. What happens when the father dies?



The 70 % member’s interest will be an asset in his estate, which the son can inherit in terms of the Will. The lifelong usufruct lapses upon the death and will be cancelled by the Executor of the Estate of the father.

Soortgelyk

 

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