Pay Online
Instant Conveyancing Quote
Friday, October 4, 2019
Everyone who’s run a business has woken up in cold sweats over deadlines, staff, buildings, anything of detail in the business but very few have sat back and looked at the biggest risk to their business… their not being in it.
I get it, we’re all invincible, we’ll all sort it out eventually and there’s no rush whilst orders need to be fulfilled and wages need paying, but for one of my friends this all came home to roost last week.
My friend is a great businessman having learnt from the best, his mother and father, who are still alive and still own all of the business assets and have been planning to sort things out, and indeed, promising to themselves and their family to do so, for the last twenty years.
Last week his mother was taken seriously ill. Fortunately, she’s ok and due to come out of hospital this week but it could have been very different. The family have suddenly realised, however, that they don’t know when something could happen again, both parents are in their sixties, and the potential liabilities to pay tax if the matters aren’t sorted soon could be huge were one or both of them to die. “Don’t panic”, I said, we can sort that out, but the other issue was one they hadn’t thought about at all. For four days nobody could deal with the bank, my friend’s mother, the head of finance, and the owner of many of the elements of the business in her sole name, didn’t have anything in place to enable the business to run without her. The situation could have been disastrous and without proper planning in place many businesses collapse when the main owners are taken ill suddenly and yet this is something that can be managed relatively easily. Banks can’t take instructions from just anyone, elements need sign off and the bank won’t want to see a business trade without someone taking authority.
If there are no provisions in place the family of the owner can apply to court to get the necessary authorities, but the easiest and cheapest way to prepare for this is to create powers of attorney which can even survive situations where someone is unconscious and unable to take care of the business at all. These are called lasting powers of attorney (LPA) and without exception, every person who runs a business should have one. Compared to the cost of the business going bust or applying to court for an order, they are incredibly good value, and they will only take an hour or so out of your work schedule for you to organise one. If you want your business to survive you being ill, if you want your family to be able to benefit from your years of hard work, you need to talk to a lawyer about putting an LPA in place and not leave it until things are too late.
Our Wills, Probate and Trusts Team can be contacted on 0191 2328451. View our specialist wealth management services.
Written by Felicity Nelson, Senior Associate and Head of Wills, Probate & Trusts
