By Vicki Pearce
Partner
Wilson Browne Solicitors
WE’VE all heard about Powers of Attorney and mainly these are associated with elderly people suffering an incapacity, most commonly in relation to dementia or Alzheimers. However mental incapacity can strike any of us at any time whether temporarily or permanently. Illness or an accident might occur that will affect your ability to perform your duties and carry on your business. Have you ever given thought to what would happen to your business, who would carry on your business affairs and maintain an income for yourself and your family in the event that you could not?
If you are a sole trader you will run your business as an individual and the business does not have its own legal entity. A Business Lasting Power of Attorney, therefore, can be a very effective way for you to make provision for the continuity of your business affairs in the event of an accident or illness striking.
If you are a partner in a partnership business you made have already made provision within a Partnership Agreement, you should consult your partners before making a Business Power of Attorney. If, however you don’t have a Partnership Agreement there is no provision within the Partnership Act dealing with incapacity of a partner and, therefore, you and your fellow partners could find yourselves in difficulties. It is common for business partners to appoint each other under a Business Power of Attorney or perhaps a business partner and close family member to be appointed jointly.
If you are a company director you may already have provision within your Articles of Association and these should be checked before making any Business Power of Attorney. If your company uses the model articles for private companies limited by shares as set out in the Companies Model Articles Regulations 2008 ‘a person ceases to be a director as soon as a registered medical practitioner who is treating that person gives a written opinion to the company stating that that person has become physically or mentally incapable of acting as a director and may remain so for more than three months’. This may meet your requirements but if not you should consider both amending your Articles of Association and making a Lasting Power of Attorney that does suit your needs. If you are the sole director it may not be appropriate to amend these articles and a Business Lasting Power of Attorney would enable someone of your choice that you trust to continue the day to day running of the company.
Powers of Attorney are not limited to old age and it is never too early to make one but it is almost certainly, in some circumstances, too late.
For more information or to arrange an appointment call 0800 088 6004.
