Short Answer

Usually, no. In North Carolina, your will cannot override a company’s operating agreement, shareholder agreement, or buy–sell agreement. Those governing documents control what happens to your ownership interest at death (including any required buyout or transfer restrictions). Your will can only pass whatever rights remain after those agreements and state law are satisfied.

Understanding the Problem

In North Carolina, can you use your estate plan to give your ownership interest in a closely held business to your son if the company’s operating agreement or shareholder agreement says something different? The decision point is whether private company documents control transfers at death, or whether your will does. The actors are you (the owner) and, after death, your personal representative working with the company under its governing documents.

Apply the Law

North Carolina treats an LLC membership interest or closely held corporate stock as personal property, but transfer and admission rights are set by the company’s governing documents and, if silent, by state law. Death commonly triggers buy–sell provisions or transfer restrictions. A will can devise your economic interest, yet your son may not become a voting member or shareholder unless the agreement’s conditions (like consents or qualifications) are met. For professional entities, additional licensing-transfer rules apply. Estate administration happens through the Clerk of Superior Court, and the personal representative has specific duties and timelines (for example, filing an inventory within three months).

Key Requirements

• Governing documents control: Operating or shareholder agreements and buy–sell contracts set the rules on death-triggered buyouts, transfer restrictions, and consent requirements.
• Economic vs. control rights: Your will may pass only economic rights unless and until the company admits your son as a member or shareholder under the agreement.
• Death-triggered procedures: Notice and election deadlines in the agreement (often short) must be met to preserve rights and set valuation and payout terms.
• Entity-specific limits: Professional corporations/PLLCs require licensed owners; S corporations limit eligible shareholders—transfers must comply or be redirected to a permitted trust or a buyout.
• Estate process duties: The personal representative must open the estate, inventory assets within three months, and follow any required sale/assignment steps consistent with company agreements and North Carolina law.

What the Statutes Say

• North Carolina LLC Act (Chapter 57D) — Default rules for LLCs; operating agreements govern transfers and member rights.
• N.C. Gen. Stat. § 28A-13-3 (Powers and duties of personal representative) — Includes authority to manage/continue a decedent’s business when needed.
• N.C. Gen. Stat. § 55B-7 (Professional corporations—transfer of shares at death) — Requires notice to the licensing board and transfer to a qualified owner within one year.
• N.C. Gen. Stat. § 28A-20-1 (Inventory) — Estate inventory due within three months of qualification.

Analysis

Apply the Rule to the Facts: No specific facts were provided. Consider these brief scenarios: If your LLC operating agreement requires a mandatory buyout at death, your will cannot redirect the interest to your son; instead, the estate receives the buyout price and your will can pass those proceeds. If the agreement allows transfers to family but only with manager/member consent, your son may receive economic rights under your will right away, but he becomes a voting member only after the company formally admits him.

Process & Timing

1. Who files: Personal representative (PR). Where: Clerk of Superior Court in the North Carolina county where the estate is administered. What: Application for Probate and Letters (AOC‑E‑201, testate) and initial filings; later, Inventory for Decedent’s Estate (AOC‑E‑505). When: Inventory is due within three months of qualification; agreement-specific notice/election windows often run 30–60 days from death—check your governing documents.
2. Company steps: The PR promptly notifies the company and requests the operating/shareholder agreement, confirms any death-triggered buy–sell, valuation method, and timelines, and either initiates the buyout or prepares an assignment consistent with transfer restrictions. Admission of your son as a member/shareholder typically requires company consents or amendments as the agreement specifies.
3. Finalize: The PR closes the sale/buyout or completes permitted transfers, updates company records, and reports the asset or proceeds on the estate accounting. For professional entities, provide licensing board notice and complete qualified transfer within the statutory period.

Exceptions & Pitfalls

• Assuming a will controls transfers: it does not override buy–sell terms, consent requirements, or transfer restrictions.
• Confusing economic and control rights: your son may receive distributions but not voting/control rights unless admitted under the agreement.
• Professional and tax status traps: non‑licensed heirs cannot hold professional shares; S corporation eligibility rules limit who can be a shareholder.
• Missing contract deadlines: late notice or elections can forfeit buy–sell rights or valuation protections.
• Record‑keeping gaps: failing to update company records, execute proper assignments, or reflect the transfer in estate filings can delay administration.

Talk to a Estate Planning Attorney

If you’re planning to leave a business interest to your child or need to navigate a buy–sell after a death, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at (919) 341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney–client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.