Powers of Attorney are mainly associated with elderly people suffering an incapacity, most commonly in relation to dementia or Alzheimers. However, mental incapacity can strike any of us at any time whether temporarily or permanently. This could have a devastating effect on your business and on your income for yourself and your family.
If you are a sole trader, you will run your business as an individual and the business does not have its own legal entity. A Business Lasting Power of Attorney, therefore, can be a very effective way for you to make provision for the continuity of your business affairs in the event of an accident or illness striking.
If you operate your business as a partnership you may have already made provision within a Partnership Agreement and you should consult your Partners before making a Business Power of Attorney.
If you don’t have a Partnership Agreement there is no provision within the Partnership Act dealing with incapacity of a Partner and therefore you and your fellow Partners could find yourselves in difficulties. It is common for business partners to appoint each other or a professional or close family member.
If your business account requires two signatures to operate and one of you becomes incapable of managing your business affairs, the whole business will be affected; you may not be able, for example, to pay the creditors; salaries or rent on business premises.
If you are a company director you may already have provision within your Articles of Association and these should be checked before making any Business Power of Attorney.
If your company uses the model articles for private companies limited by shares, as set out in the Companies Model Articles Regulations 2008, ‘a person ceases to be a director as soon as a registered medical practitioner who is treating that person gives a written opinion to the company stating that that person has become physically or mentally incapable of acting as a director and may remain so for more than three months’.
This may meet your requirements but if not, you should consider both amending your Articles of Association and making a Lasting Power of Attorney that does suit your needs.
If you require any further advice contact Wilson Browne Solicitors for all the help you need.
This is a heavily abridged version of a more comprehensive guide. For the full version visit www.wilsonbrowne.co.uk/guides
Find out more about Wilson Browne Solicitors on 0800 088 6004 or visit www.wilsonbrowne.co.uk
