What would happen to your business if you no longer had the capacity to make the decisions? Is it time you planned for an alternative business future you hope will never materialise?
There are approximately 5.4 million SME’s in the UK; defined as small to medium enterprises with staff numbers fewer than 250. SME’s account for 99% of all UK businesses. Are you a member of the 99% and if so, what is your plan for if you no longer had the capacity to run your business?
Capacity has a broad spectrum. It could be temporary if you were stranded abroad for a couple of days unable to sign documents. Or it could be on a semi-permanent basis by way of long term sick leave. Whatever the circumstance, it is important that your livelihood is protected.
A business Lasting Power of Attorney (LPA) is a legal document which allows a business owner to choose an authorised person, known as an attorney, to make the business decisions on their behalf. The misconception of an LPA is that you relinquish full control on a permanent basis once you have signed.
However, an LPA empowers you to decide when it can be used as the attorney will need your consent. Additionally, it provides you with the opportunity to choose who the attorney would be. From a business perspective, it would be beneficial for the attorney to be familiar with the business and how you run it.
Should an LPA not be in place and you were to become incapacitated, the Court of Protection may become involved and they may choose an attorney to make decisions for your business that you would not have chosen.
We all hope an LPA will never be required in our lives. However, it is a practical business decision to rely on a plan you have put in place for every eventuality, rather than relying on hope.
This article contains general advice only and your individual business structure will need to be considered prior to an LPA being drafted and agreed.
If you would like further information on a business Lasting Power of Attorney and would like to discuss your individual circumstances, please do not hesitate to contact our Wills and probate department on 0175 321 6399.
By Michelle Hayes, probate executive in the Wills and probate team