As a business owner, have you ever been advised to make a business power of attorney?
Bromleys’ John Longworth explains why making a Business Power of Attorney could help you protect your company against management problems caused by coronavirus or other factors.
The basics: what is a power of attorney?
A power of attorney allows someone else (e.g. a relative, friend, professional advisor or lawyer) to take decisions on your behalf if you become unable to do so for yourself due to illness or losing your ability to understand matters (e.g. dementia). The people acting for you are called attorneys.
You can give authority for decisions covering either personal welfare issues or property and financial matters. A different document is needed to appoint attorneys in welfare matters and financial matters. However, they can be the same person.
We advise all clients to appoint attorneys for welfare and financial matters to enable their affairs to continue to be properly managed with the minimum of disruption.
Without an attorney, the law will not generally allow other people, such as your partner or adult children, to take decisions for you without a costly and lengthy court process.
Is a Business Power of Attorney different?
As a business owner (whether a sole trader, business partner, company director), you should consider how your business would continue to be managed if your involvement was prevented by:
- An accident, especially one causing a brain injury
- A debilitating medical condition (eg Alzheimers)
- Being out of the country (on business or holiday)
Who would have the legal authority to deal with HMRC (business taxes), suppliers (entering into contracts), your business bank manager (business loans), cashflow (suing debtors), accounts (signing bank payments or cheques) or, more generally, dealing with and authorising HR and payroll functions?
Would you want your staff to have the uncertainty of what will happen with the business?
Do you want to ensure the smooth running and financial protection of your business for the benefit of your family or key workers?
Can you afford to risk your personal investment in the business, or its survival, by not taking this simple action?
To plan for potential problems like these, and their inherent risk consequences, and to protect your own personal financial interest in your business, you must make a Business Power of Attorney.
How we can help