Planning for the unthinkable
Worrying about the worst case scenario is something many business owners will to the back of their minds. But having an idea of what would happen if the boss takes ill or is incapacitated in the longer term, is an absolutely vital piece of business planning says Vincents Solicitors’ Lisa Lodge.No one wants to think about the worst happening, but that fear could leave your business exposed, your employees at risk and your customers out in the cold if measures are not put in place ahead of time.
Business owners can protect the future of their company by using a legal process normally associated with wills and probate. Lasting Power of Attorney is a process which sets out what should happen in the event of someone being unable to manage their own affairs.In the case of a business, the document can provide a blueprint for running the company should the owner be incapacitated through illness or accident, on a temporary or permanent basis.
An LPA for property and financial affairs will outline who should take over the day-to-day operation of the business, make decisions and give access to bank accounts, insurance, investments, and property assets. This would be absolutely vital for paying staff and suppliers, without which the business could get into trouble very quickly, for example.
The LPA establishes a named person or persons who would take responsibility for the business. In a scenario similar to a personal LPA, this could be a family member or friend, or a named professional, including a solicitor. It is often considered more appropriate to appoint an external, independent person to the role as they are more likely to be immune from the emotional and personal impact of the situation which led to the LPA being enacted in the first place, or have prior experience of similar situations.