YOU wouldn't fly on a plane that had no co-pilot; you wouldn't sail on a boat with no First Mate... so why would anyone leave their business exposed to risk with no 'backup plan'?
What would happen to your business if you lost capacity? Who would be the person at the controls; the steadying hand at the wheel?
Since the Mental Health (Discrimination) Act 2013 prohibited directors and shareholders from automatically being removed from their positions (should they lose capacity) it has become a necessity for business owners to have a Business Lasting Power of Attorney for Property and Financial Affairs in place, to set out their wishes should this situation occur.
Drafting a Business Lasting Power of Attorney enables your attorneys to have the ability to manage your business in such a way that it remains operationally viable. Eg access business banking, sell shares, renew insurance premiums and many other decisions regarding the daily running of the business. It may be essential for you in a number of situations i.e. if you were to be diagnosed with an illness or injury which meant you couldn't work. You could even extend this to situations such as holidays.
LPAs are flexible, so you can use them as and when you need to, and if you wanted to take back the authority you could do so. Furthermore, you are able to revoke the LPA should you sell or retire from the business.
Typically, if you are a sole trader then it is likely that you won't have any other legal entities in place which consider what should happen in the event of you being incapable to make decisions with regards to your business... so it would be considered vital for you to have a business Lasting Power of Attorney. If you are in a partnership then there may be provisions in your partnership agreement, however, this is not always the case and you should check carefully. Directors should consult their Articles of Association which should provide a clause to cover this eventuality, however if you are the sole director of a small private company then it is likely that your Article's of Association will terminate the appointment of a director and, therefore, it would be detrimental not have a Business Lasting Power of Attorney.
Without a business LPA this decision will fall to the Court of Protection to appoint a Deputy to make these decisions on your behalf. This takes time, and more to the point, the person chosen is out of your hands.
Don't leave your business helpless - call Wilson Browne Solicitors on 0800 088 6004.