Future proofing your business
Article posted: 31st May 2019
Many business owners would have been shocked to hear of the untimely death of a global law firm chairman who was in his early 50s and no doubt made some wonder what would happen if they were suddenly unable to run their business.
It certainly makes sense to have a plan in place – a living will if you like – which sets out what should happen in such an event.
This could simply detail the key information about your business, which would enable someone else to step in and oversee it. It would include details regarding your bank, professional advisers and IT support providers and hold key documents such as insurance policies, renewal dates, your business plan, important customers/clients and payroll details.
Alternatively, it could be a more comprehensive document, which assigns responsibilities to named individuals.
In either case, you should ensure the document is regularly reviewed as part of good business continuity planning.
An often-overlooked ‘must do’ is to appoint a lasting power of attorney (LPA) – someone you trust to make decisions on your behalf if you become unable to make decisions for yourself in the future.
LPAs can cover personal welfare as well as property and financial affairs and enables a named individual to write cheques and pay bills, sell or rent out property, carry out trade or business activities, honour any contractual obligations, and conduct any legal proceedings on your behalf.
You can arrange for a LPA if you're aged 18 or older and have the mental ability to make financial, property and medical decisions for yourself. Many people will appoint a LPA while reviewing or revising their will and usually with the help of a solicitor. However, you can also apply online via www.gov.uk/power-of-attorney.
Your attorney also needs to be 18 years old or over and could be your spouse or partner, a relative, friend or a professional. They do not need to live in the UK or be a British citizen and they should be someone you trust to make decisions in your best interest and whom you believe will manage your finances and/or business well.
You may want to appoint more than one attorney – perhaps one focused on family matters and another on business matters. You need to decide if they can make decisions separately, also known as ‘joint and severally’ or if they’ll make them together (‘jointly’) and so need to agree every decision.
LPAs can be cancelled at any time, but you must have the mental capacity to make that decision. It’s good to know that the Court of Protection can cancel a LPA if an attorney isn't acting in a person's best interests and is making excessive ‘gifts’ to themselves or others.
It’s certainly worth thinking about how your business would survive without you and even better if you can put something in place for that possibility. It would certainly give you, your loved ones and business stakeholders more peace of mind should they have to face that (hopefully unlikely) situation.
If you would like to discuss any of the issues raised in this article, please contact Nigel Kimber on 020 8309 0011 or firstname.lastname@example.org.
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