Director death or incapacity: keep company banking authority lawful

A company can still own money and owe bills when the only director dies or becomes unable to manage affairs, but online-banking credentials do not become transferable property. The company needs lawful decision-making authority, and the bank needs evidence showing who can now act for the company.

If a sole director dies, the company needs a new director before ordinary management can continue

GOV.UK says a company that no longer has a director must appoint a new one, including where a sole director has died. Shareholders will normally need to agree the appointment. A company without a functioning director can still have employees, taxes, customer commitments and bank cash, but nobody should simply use the deceased director's credentials to keep payments moving.

Notify professional advisers and the bank quickly. Preserve the account rather than improvising access. The immediate objective is to restore lawful corporate authority so the company can make decisions, instruct the bank and continue or close operations under the correct governance.

The articles can determine how a replacement director is appointed in an emergency

Companies House model articles for private companies allow directors to be appointed by ordinary resolution or by the existing directors. They also contain a specific emergency provision: where death leaves the company with no shareholders and no directors, the personal representatives of the last shareholder to die can appoint a director by written notice.

Not every company uses the current model articles without modification. Obtain the actual articles and shareholder records before relying on that provision. If the deceased director was not the only shareholder, the surviving shareholder position can produce a different appointment route. Complex estates deserve company-law advice rather than assumptions based on a generic template.

A lasting power of attorney can cover business financial affairs, but it does not itself appoint the attorney as company director

Office of the Public Guardian guidance says a property and financial affairs LPA can be drafted to cover business affairs, and a person can create separate LPAs for personal finances and business matters. That can be valuable if an owner loses capacity and needs somebody to manage personal business interests.

However, the company's directorship is a corporate office governed by company law and the company's articles. An attorney acting for a shareholder or director personally should not assume that the LPA automatically makes them a director or gives them every power attached to that office. The company may still need a director appointment or other corporate decision before the bank can accept instructions on behalf of the company.

The bank needs evidence of the new authority before it changes account access

Contact the bank's bereavement, business-support or legal-authority team and ask for its document list. The bank may need the death certificate, Companies House update, board or shareholder resolution, identification for the replacement director and a new mandate. For an attorney acting under an LPA, organisations can ask to see the registered LPA, certified copy or an online access code.

Do not share passwords, authentication devices or a deceased director's mobile banking access. Named permissions create a lawful audit trail and can be withdrawn later. Once authority is restored, test payroll, supplier payments and account administration rather than assuming the new director automatically inherited every digital permission.

Prepare for critical payments before the company depends on one person's access

A company with one director and one banking user has a single point of operational failure. Add another authorised person where governance permits, document how a replacement director could be appointed and ensure advisers know where the corporate records are kept. The goal is resilience, not casual shared access.

Identify payroll, PAYE, VAT, rent, insurance and loan payments that cannot wait several weeks. Keep enough information for another lawful officer to understand upcoming obligations without opening the deceased or incapacitated person's private email. A continuity plan should make the company's financial commitments visible even when one individual is unavailable.

Maintain an emergency file with corporate records, not personal passwords

Keep the articles, shareholder register, director list, bank-account list, relationship-manager details, borrowing documents and next major payment dates in a secure company-controlled location. Include the process for contacting Companies House advisers, accountants and the bank after a death or incapacity event.

Do not store another person's banking password as the continuity solution. Credentials prove the identity of the named user, not the legal authority of whoever finds them. The emergency file should tell a replacement officer how to establish authority properly and then obtain their own banking access.