Help at hand if owner of firm is incapacitated.
QI own 100 per cent of a profitable business and as the driver/controller of the business I want to ensure its succession. What would happen if I was incapacitated in some way? AYOU probably control all aspects of the business and are the only one with a complete overview of all that goes on. You might also be the sole signatory for financial matters.
While many owner managers invest in staff enabling them to take a greater day-to-day role, their promotion does not necessarily mean they would be qualified to run the business if you are unable to do so.
In short, if no plans are in place, transactions cannot be completed, stock cannot be purchased - and operating bank accounts and overseeing the running of the business cannot occur. Staff and suppliers will be unpaid. After 28 days of confusion, creditors can apply to Court and all those years of building a business count for nothing.
There is a solution - namely a Business Lasting Power of Attorney (BLPA). Similar to a lasting power of attorney, a BLPA is a legal document that lets you appoint a person whom you trust and know will make the decisions and do the job in the way that you would want.
This gives you more control over what happens if you have an accident or an illness and can't make decisions.
Think of a BPLA as an extension of managing your business interest, as part of your business crisis management practice and reducing business risk. BLPAs have become more relevant as the Mental Health (Discrimination) Act 2013 no longer allows for mentally incapable directors to be removed if they lack mental capacity, either long term or temporarily. The Company's Act requires directors to act responsibly and without a BLPA in place, you could be considered to breach your fiduciary duty.
A BLPA also provides reassurance to your loved ones at what is likely to be a difficult time.
Haines Watts is shortly running a seminar in this respect, so if you are interested in attending, please let me know.
Name: Terri Halstead Title: Tax Partner, Haines Watts, Birmingham Contact: 0121 456 1613 or firstname.lastname@example.org
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|Publication:||The Birmingham Post (England)|
|Date:||Oct 19, 2017|
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