Q: when a sole proprietor of a corporate entity dies, must a fiduciary be appointed to wind up the corporation?
is any pending litigation stayed subject to the appointment of a fiduciary
NYS 2nd department law only
A: You are mixing legal terms. A sole proprietor is the opposite of a corporation. A corporation might have a sole shareholder. If that is what you mean and the individual is not a defendant, then there is no statutory stay of the case. Who has authority to act will be determined by the bylaws, or else a fiduciary must be appointed by the Surrogate.
A: Yes, either an executor or administrator of the estate must stand in the shoes of the owner / shareholder and act in the best interest of the entity, if that is "winding up" the corporation is debatable since the shares are ultimately personalty and should go to the estate of the sole-proprietor who may want to take control of the corporation. Pending litigation is not automatically stayed so the attorney for the corporate entity would be wise to apply to the court for a temporary stay.
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