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How long would your business survive without access to the business bank account?
Thursday, February 6, 2020
Thursday, February 6, 2020
Your banking app or internet banking service being down for just a day can be hugely inconvenient. Imagine that it was not just being unable to view your statement or make new one-off payments, but that all of your accounts were actually frozen.
Now, imagine it is not a short term technical issue, but something which could go on for weeks and months. How will your employees act when they aren’t paid? How long will it be before creditors take action? How will your business function if you can’t purchase the things you need, for example, stock? What will the financial impact be on you and your family?
Scared? You should be.
Incapacity is often associated with old age and dementia, but it can happen to anyone at any age and may be either short term or long term. For business owners, this poses a huge financial risk for themselves, their employees and their families. For Company Directors the issue could be even worse, as, on top of the crippling financial impact on their livelihood, the remaining capable Directors are likely to be in breach of their duties to their shareholders under the Companies Act 2006 due to their inability to act.
Unlike so many potential issues that face your business, this problem is actually incredibly easy to solve and does not have to be expensive. All that is required, is for you and your fellow Partners or Directors to have planned ahead and made and registered Lasting Powers of Attorney (LPA) that appoint appropriate people to make financial decisions connected with your business.
It costs a maximum of £82 to register a Lasting Power of Attorney with the Office of the Public Guardian, and the legal fees to advise on, prepare and arrange the registration could be less than £500 per person, depending on your circumstances. What is more, these costs can be a tax-deductible business expense, thus saving you tax and protecting your business all at the same time.
When the cost of incapacity to your business could be many thousands, can you afford not to make an LPA?
For further information, options and costs, or to make an appointment, please do not hesitate to call the Wills, Probate and Trust team at Samuel Phillips Law on 0191 2328451 or email admin@samuelphillips.co.uk
Written by Felicity Nelson, Senior Associate and Head of Wills, Probate & Trusts
