Whether you are a director or a shareholder of a company (or both), your prime concern will be ensuring that your business runs properly, grows and hopefully makes you a nice profit. We all appreciate the impact external factors have on business such as the economy and competition but there is another potential risk to your business. If you are a director, you may have considered the possibility of taking out keyman insurance in the event of illness and/or death. However losing your mental capacity to do your job whether through the onset of dementia or as a result of an accident may cause your business to suffer the most. It may affect insurance costs, future claims, the ability to complete unfinished contracts and impede the day to day running of the business. This is likely to have an even greater impact if you are the sole director of a company.
Business Lasting Powers of Attorney (“BLPA”) could be a good way to manage that risk. Provided your company’s articles of association allow you to do so (or at least do not prohibit it), an individual appointed as an attorney under a BLPA can step into your shoes and run the company according to your instructions rather than as an independent director making his own decisions about the company. A BLPA sets out more detailed instructions and processes to enable that individual to act in your best interests when it comes to decision making. The individual should be someone you trust, understands your business as well as being knowledgeable enough to run your businesses for you.
For further advice and information about BLPAs, please contact Jennifer Howard-Dobson.