What would happen to your business if you or a partner was suddenly unable to make decisions? It’s something firms should look at sooner rather than later, to make sure an illness or incapacity doesn’t knock the business off the rails.
Graham Fuller, a partner at FBC Manby Bowdler, said most people had heard of Lasting Powers of Attorney in relation to decisions about an individual’s health and finances, but businesses should also look at making similar arrangements to make sure they could keep trading in an emergency.
He said: “The pandemic brought it home to many businesses that a sudden illness can do serious damage to their ability to trade.
“Covid is still with us, of course, but there are, unfortunately, many other debilitating illnesses which can unexpectedly put you out of action for a while. If you were in hospital with pneumonia, or after a heart attack, or otherwise experienced mental incapacity, would someone else be able to make business decisions on your behalf? And could you be sure they would act in the way you would wish?
"Business owners should seriously consider making a Business Lasting Power of Attorney to protect their interests. It enables somebody to make decisions on behalf of a business owner if they experience mental incapacity or are otherwise unavailable for a period of time.”
Graham, who heads the wills, probate and lifetime planning team in FBC Manby Bowdler’s Shrewsbury office, said not having Business Lasting Powers of Attorney in place exposes firms to unnecessary risk.
He said: “The alternative, in the event of mental incapacity, might involve an application to the Court of Protection. A deputy would be appointed by the Court to fill their role, but at significant cost and delay – both of which could damage the business while the process was ongoing.
“A Business Lasting Power of Attorney is a cost-effective assurance that decisions could continue to be made should an urgent matter arise while you were unable to be involved personally, whether that was for a holiday, illness or mental incapacity.
“Lasting Powers of Attorney are tailored to each business’ needs, so it is vital to get good independent legal advice to make sure all of your interests are protected.”
Graham added: “There are many stresses involved in running a business – worrying about what will happen if you are suddenly taken ill doesn’t have to be one of them.”