As a business owner, it’s more important than ever to have a solid continuity plan to ensure that your business will keep running smoothly if you were to become unable to make decisions.
Reasons that you may be unable to make those decisions could be if:
- you were abroad on holiday or for business
- you were to have an accident
- you were to have a medical condition that incapacitated you
If that were to happen with no plan in place, there are implications for your business that you need to consider. For example:
- who will authorise the payment of bills?
- who will sign cheques?
- who will pay salaries?
- who will have the authority to liaise with suppliers/customers?
- who will be the decision maker?
- who will be authorised to speak with the bank should the need arise?
Don’t assume that a family member or a business colleague will gain the authority to make these decisions on your behalf – this assumption could leave your business exposed to risk.
To protect your interests, and those of your business, you should consider making a business Lasting Power of Attorney. This way you choose and appoint the person(s) you wish to be responsible for decision making in the event that you are unable to. Leaving you secure in the knowledge that in your absence, be it short-term or long-term, your business will be safe in the hands of the people you trust.
In the event that you do not have a Lasting Power of Attorney, or any other continuity planning (e.g. a clause set out in a Partnership Agreement) and you become unable to make business decisions, it may become necessary to make an application to the Court of Protection for the appointment of a deputy to act on your behalf. This process can be expensive, and there’s no guarantee that the Court of Protection will choose someone you would have chosen. It could also take more than six months before a deputy is appointed, during which time your business may be vulnerable and at risk.
To avoid disruption, it should be part of any business owner’s continuity plan and crisis management strategy to consider making a business LPA.