Business owners must have the capacity
In our role as professional advisers a lot of what we do involves asking ‘what if?’ The Covid-19 pandemic brought the ‘what if I’m unable to run my business due to illness’ question to the forefront of many people’s minds. The only way for a business to keep running smoothly when the business owner becomes ill and or loses capacity, is to put a Power of Attorney in place.
A Power of Attorney is a legal document that allows someone, while they still have full mental capacity, to nominate a trusted person to make financial decisions on their behalf, in case they lose capacity e.g if due to illness or injury they cannot manage their affairs.
A Power of Attorney is the only way to choose who will deal with your business affairs if you are unable to do so. That person needs to have the skills, experience and knowledge to keep the business going if they are unable to make day-to-day decisions, so it’s essential this is thought through and planned for.
All lawyers will have had experience where clients who have been sole directors and principal shareholders of businesses did not have a Power of Attorney in place and unfortunately, the companies had to fold, as it was impossible for those left in the business to pay staff, pay rent and pay suppliers.
In addition to putting a Power of Attorney in place, there are other simple steps that they should take place to avoid business disruption if the business owner were to suddenly become ill for example:
- Review the bank mandate and ensuring that there is more than one signature.
- Ensure that online banking details are available to someone else
For further information contact Neil Shaw on 01274 386 992 or ku.oc1748147430.fcl@1748147430wahsn1748147430.
LCF Law is a sponsor of the Yorkshire and Humberside Family Awards (YHFBA) which is taking place on Friday 10 November 2023 at the Majestic Hotel Harrogate
