Covid-19 has been a wake-up call for business owners to plan for the unexpected. Some simple legal planning could protect their business in the event of illness or accidents
As businesses try to return to ‘normal’ after the havoc of the past two years, the last thing they want is any further derailments. And one lesson of the coronavirus pandemic is the critical need for business owners to have their personal affairs in order.
One key aspect of this is making contingency plans in case they fall ill or become incapacitated. After all, 2020 taught all of us that the unthinkable really can happen.
"Many people assume that a partner, family member or business colleague could quickly take up the reins. In reality, this may not be the case."
‘What if’ preparations are critical
Let’s take the example of a sole trader or someone who runs a small business. If they were suddenly incapacitated by a serious illness or injury, they would still need someone to pay suppliers, manage the bank account, deal with contracts or insurance or file VAT returns.
Many people assume that a partner, family member or business colleague could quickly take up the reins. In reality, this may not be the case.
Key example: the business bank account
If the business bank accounts were only in the owner’s name, no one else would be able to take over managing the finances. They would have to apply to the courts for a ‘Guardianship’, a process that can take six months or more. This could be catastrophic for the company’s credit record, business relations and reputation, and in turn for the family finances.
There’s a simple solution, however. It’s a business Power of Attorney (PoA), and we explain the key details below.
