Protect your business with the right advice and documents
None of us want to think about the possibility of being ill and not being able to run our businesses. And we certainly don’t want to think about what might happen to our businesses when we are no longer here.
But not having a contingency plan can be disastrous for you, your business, your family, your staff and colleagues, and your customers.
I talk to so many local business owners who haven’t even thought of protecting their businesses in their Wills, and don’t know about the tax position. And almost always they haven’t even considered what could happen without a Power of Attorney!
So, let’s look at why you need to do all of these …
Protect your business in your Will
Have you thought about what you would like to happen to your business when you’re no longer here?
- Does it carry on as is?
- If it’s a family business would you like your spouse or children to carry on?
- Would it be best to sell it? And who should run it in the meantime?
- Or do you want your Executors to wind it up and close it down?
Without specific clauses in your Will any of the above could be difficult. I’ve recently helped a local business owner who didn’t have specific instructions in his previous Will, even though he clearly knew what he wanted to happen. Some changes to the Will made it much easier for his family after his passing. Without these, they would have had far less control than they have now.
And without a Will your business would just pass to your closest family – and they may not want to, or have the skills to, continue running it.
Protect your business and tax position – for you and your family
Many businesses attract favourable allowances for Inheritance Tax, so it’s important to understand those. Because by careful planning you can also ensure that whoever inherits your business can also benefit from these allowances even if they aren’t going to be directly involved in the day to day running of it.
We work alongside your Accountant and/or Financial Advisor to make sure your Will protects these allowances for the future.
Protect your business with a Lasting Power of Attorney
What happens to your business if you are unable to make decisions? That may be if:
- You were to have an accident
- You become ill and perhaps were in hospital
- You are abroad – on holiday or business
- You want to take some time out e.g., because of a mental health issue
Have you thought about who would:
- Ensure bills and salaries are paid?
- Sign cheques?
- Deal with customers?
- Fulfil orders?
- Place/renew insurance?
- Sign/renew contracts?
Many of you may assume that a family member or business colleague can step in where necessary to make decisions and take actions for you. That’s not the case. They don’t have the legal right to do that. And actually, they may not be the people you want to make those decisions!
The only way you can ensure that you have contingency and provide authority for the people you want to make decisions for you is with a Lasting Power of Attorney. This is a legal document that authorises those you choose (your Attorney(s)) to make certain decisions on your behalf.
You can make an LPA covering Property and Finance for your personal affairs and, if you want to use the same Attorneys, you can also extend this to your business affairs. If you prefer to have separate Attorneys to make decisions for your business, then you can make a separate business LPA.
For Sole Traders or Sole Directors of Limited Companies, an LPA is an effective way to make sure your business continues. With Partnerships, there is often provision in the agreement for continuity if one of the partners isn’t able to make decisions, but you should check it is so. In Limited companies, the terms may terminate a director’s position if they lose capacity, but you may want someone to act for you instead – take your seat at the table so to speak.
If you were to become incapacitated, it is too late to make an LPA and one can’t be made on your behalf. The only option then is to go through the Court of Protection to appoint a deputy – this is an enormously lengthy and expensive process. So whilst we all think we are invincible and nothing will happen to us, take the simple option now and put a Lasting Power of Attorney in place. And if you never need it, then fantastic !!!
Protect your Business with Morecambe Bay Wills and Estates Limited
Our team can discuss your business plans with you when you make your Will, and ensure the right wordings are in place to make sure what you want to happen will actually happen.
We can also review how your business would be affected in the event that you became incapacitated and help you get Lasting Powers of Attorney and guidance for your Attorneys in place to ensure your business can continue until you are able to come back to the fold.
We provide affordable advice and both documents are tax deductible too. And you will also be helping a local charity as we donate 5% from every one of our invoices to CancerCare North Lancashire and South Cumbria to help with the fantastic work we do.
Contact us on 01524 571032 or info@morecambebaywills.co.uk to see how our team can help your team. Or request our FREE “Protecting your Business” Information Guide by completing this simple form.