Are you a business owner or company director? Who would manage your business if you suddenly couldn’t? Have you appointed anybody to act as your attorney if you are incapacitated? Not simply is there someone capable of acting on your behalf, but have you prepared a specific document to give them the legal authority to do this?
It’s something most business owners don’t even consider, even though it’s really important.
A Power of Attorney is an important legal document which allows someone else (who you have chosen and who you trust) to continue running the business and keep it operating (or sell it if necessary) in the event that the owner, or a key director, loses mental or physical capacity, like a stroke or serious injury or mental health issues. If you were incapacitated, how would it affect your business?
- Commercial contracts – can they be agreed and signed?
- Suppliers or sales agreements – can they be negotiated and signed?
- Cheques & payments – can they be executed?
- New Products & Stock – can it be purchased?
- Salaries – can they be paid?
- Investment, funding & share decisions – who makes these?
- Can the business be sold?
ONLY a Lasting Power of Attorney will give the legal authority to someone else to act on behalf of the business owner, if the business owner is no longer of sound mind or does not have capacity to do it themselves. A ‘gentleman’s agreement’ or a letter of authority to the bank will not be enough.
Your fellow business partners, company directors, staff and customers want the business to continue trading. The business owner and their family may well depend on the business continuing or the ability to sell it in order to keep finances going and pay the bills. However, legally they have NO authority to deal with your share of the business. Even if you have made a Will and appointed Executors and Trustees (which is also a good idea), the Will is of no use unless the business owner has died.