LEGAL
Hear it from the experts …
As a business owner , are you prepared for the unexpected ?
Private client solicitors Heledd Wyn and Owen Mason from Mowbray Woodwards solicitors , discuss the importance of Lasting Powers of Attorney for business owners . You may be familiar with Lasting Powers of Attorney ( LPAs ) as something that a relative may have with regard to their personal affairs .
However , have you given much thought to what would happen to your business if you were incapacitated ? Physical or mental incapacity can affect any of us and often without warning . A skiing accident or being run down by the proverbial bus can render us in a position where we are unable to manage our affairs in the way that we would normally expect . In these circumstances , who is running the business ?
If you are a sole trader , it is particularly important for you to draw up a Lasting Power of Attorney to appoint someone to manage the business , its bank accounts , purchase stock and pay any invoices . Would you choose a family member or a professional to undertake this role ? Ideally , it should be someone with the expertise to run a business .
If as a business owner you are in a partnership , then it is important to check the partnership agreement to see what provision is made in the event of incapacity . If there is no written partnership agreement , then the worst case scenario is that an application can be made to court to dissolve the partnership . Again , appointing an attorney who understands the business and who would be able to make good commercial decisions on your behalf is a sensible idea .
Companies are slightly different , as the removal of incapacitated directors is often dealt with in the Articles of Association . With regard to the shares owned by that director , care will need to be taken to ensure that anyone who is appointed attorney does not exercise any voting rights in a manner that would contradict the company ’ s aims and aspirations ( although again , reference will need to be made to the Articles and any shareholders ’ agreement ).
When you are considering who to appoint as your business attorney , it is crucial to choose someone who will understand the specific needs of the business . This may be someone entirely separate from the person that is nominated to manage your personal affairs . You may want a family member to manage your personal affairs and a professional ( such as a solicitor ) to manage your business affairs .
Owen Mason and Heledd Wyn from Mowbray Woodwards
Without a Power of Attorney , it would be necessary to apply to the Court of Protection in order for someone to be appointed as your deputy . This can be a time consuming process and could cost your business a great deal in lost revenue . By putting in place a Power of Attorney , if the unexpected happens , your business can continue without interruption .
For more info : www . mowbraywoodwards . co . uk
hello @ mowbraywoodwards . co . uk 01225 485700
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THE BUSINESS EXCHANGE 2017 19