An accident or serious illness can have a devastating impact on the livelihood of small business owners. This month, Clare Davies explains how to ensure someone can take the reins on your behalf…
I am the only shareholder and director of my company. Who would run the business if I was no longer able?
If you lost the mental or physical capacity to run your business, this could create problems with practicalities, such as paying employees and suppliers or entering into contracts, as family members would not automatically be able to take over in your absence.
To ensure your company can continue to operate without your input, I would recommend drawing up a Lasting Power of Attorney for property and financial affairs. This enables you to nominate someone (your attorney) to manage your money and business matters.
What would happen if there wasn’t a Power of Attorney in place?
Without a Power of Attorney, your family would most likely need to apply to the Court of Protection for a deputyship order.
This puts the decision about who runs your business in the hands of the court and unfortunately, it might not appoint the person you would choose. In addition, applications can be costly and usually take months to process, in which time your livelihood could be affected significantly.
As a business owner, it is, therefore, worth considering making a Power of Attorney, so that if you are incapacitated, the person you believe is best equipped to step into your shoes can take over without delay.
Who should I appoint as an attorney for my business?
Most people looking to draw up a personal Power of Attorney pick a close friend or family member to manage their finances. However, whilst you are likely to trust them implicitly, they might not be able to manage your business.
It can be worth considering making a separate Power of Attorney to cover your business interests. Ideally, you would still appoint someone you trust, but they would also be familiar with the day-to-day tasks and decisions you make at work and have the necessary knowledge to run the operation. It may be more appropriate to choose more than one person and this is perfectly acceptable.
The nature of your business – partnership, limited, etc. – can be important and we would want to review the set-up and any relevant documents, for example, partnership agreements or articles of association, before advising you who to appoint as an attorney.
To find out more about planning for care costs and making gifts, why not book a free 30-minute consultation with one of our probate specialists? Telephone (0114) 218 4000, email: info@tayloremmet.co.uk or complete this form.
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