Disclaimer: This article is for educational purposes only and does not constitute legal advice. To protect your rights, consult a licensed attorney in Pennsylvania.
Detailed Answer
When a person dies owning shares or membership interests in a Pennsylvania corporation, LLC or other business entity, the decedent’s personal representative (executor or administrator) must locate and review corporate formation documents and bylaws to administer the estate properly. These records include the certificate of incorporation (or organization), articles of amendment, bylaws or operating agreement, and any shareholder or member agreements.
Step 1: Obtain Letters Testamentary or Administration
First, the personal representative should obtain official letters testamentary or letters of administration from the Register of Wills in the county where the decedent lived. These letters confirm the representative’s authority to act on behalf of the estate.
Step 2: Search Public Records at the Pennsylvania Department of State
Pennsylvania corporations and LLCs file their certificate of incorporation or organization with the Department of State’s Corporation Bureau. To obtain certified copies:
- Visit the Pennsylvania Department of State Business Services portal: Business Entity Search.
- Enter the entity name or file number.
- Order certified copies of the certificate of incorporation, amendments and other filed documents.
The Certificate of Incorporation sets out the initial capital structure and incorporators’ names. Amendments may change authorized shares, corporate name or registered office.
Step 3: Request Corporate Bylaws or Operating Agreement
Bylaws (for corporations) or operating agreements (for LLCs) are typically not public but are kept at the principal executive office. The personal representative should:
- Contact the entity’s registered agent or corporate secretary in writing.
- Provide a copy of the letters testamentary or letters of administration.
- Formally request copies of the bylaws or operating agreement.
If the entity declines or ignores the request, a personal representative may seek a court order under 15 Pa.C.S. §1511(b) to compel inspection of books and records (15 Pa.C.S. §1511).
Step 4: Review Shareholder or Member Agreements
Many entities have shareholder agreements, buy-sell provisions or restrictions on transfer. These agreements often address what happens when an owner dies. Ensure you:
- Obtain and read any buy-sell or transfer restriction agreements.
- Note any rights triggered upon death—such as mandatory sale to other shareholders or a right of first refusal.
Step 5: Analyze Impact on Estate Administration
Once you have the formation documents, bylaws and agreements:
- Determine the decedent’s ownership percentage and any transfer limitations.
- Assess whether the estate must sell the interest or if heirs can step into the decedent’s role.
- Coordinate with accountants to value the interest for estate tax and probate purposes.
Helpful Hints
- Keep certified copies of all documents in a secure, organized file.
- If you encounter delays at the Department of State, follow up by phone: (717) 787-1057.
- Check whether the entity’s registered office address is current to avoid missing correspondence.
- Review the Pennsylvania Business Corporation Law for inspection rights: 15 Pa.C.S. §1511.
- Consider hiring a forensic accountant if valuation issues arise.
- Be mindful of deadlines for estate tax filings at both state and federal levels.
- Consult local rules for Register of Wills procedures—each county may differ.