Your business has fire insurance, maybe flood insurance and computer system insurance, and you may well have “key man” insurance in place in case of your death, but what would happen to your business should you, or a partner, become physically or mentally ill? Without a plan in place someone would have to apply to the Court of Protection to be appointed as your deputy. This can take months and can be costly. If you are the sole business owner, or perhaps the only person who pays staff or suppliers, your business would be at severe risk of foundering.
"One plan is to have a lasting power of attorney drawn up, specifically to deal with your business interests. This would allow you, as a business owner, to appoint someone to act on your behalf should you be unable to act yourself, temporarily or permanently," explains Wills & Tax Partner Lee Young. "More than one attorney can be named and they can act both together and separately. If your business is incorporated you may need to ensure whatever arrangements are made they are workable bearing in mind whatever limitations may be set out in your company’s Memorandum and/or Articles of Association," he adds.
You will have spent years building up your business, so take time to consider the appointment of an attorney, preferably someone who is familiar with both the workings of your company, and business generally. You may not want the same person who might be looking after your personal financial affairs. The company’s accountant is a good place for an attorney to seek advice, if indeed you have not selected your accountant, who will inevitably have an intimate knowledge of your business, as your attorney in the first place.
Your will and (in the case of an incorporated business) a shareholder’s agreement sets out your wishes in the event of your death; it makes perfect sense for you to do the same for your business should you lose capacity. Whether it is a family member or work colleague taking over the running of your business, or you want the business to be sold, smart business people plan ahead and give themselves peace of mind should the unthinkable happen.
Our Wills & Tax Team, based in Christchurch, also cover Bournemouth, Poole and the New Forest. For a free initial chat, please call 01202 499255 and Lee or a member of the team will be happy to discuss any questions that you may have.