Something that may be at the forefront of your mind, given the current times we are in, is what would happen to your business if you were currently unable to work. We have put together the below article to guide you through some of the steps you can take depending on your circumstances.
Whilst no one wants to think about falling ill, it is of paramount importance to have a plan in place during this pandemic. On-the-other-hand, the below information can also be helpful when it comes to you taking a long holiday or sabbatical.
Sole Traders
You may need to appoint someone else to make decisions on your behalf. The person you choose should have good knowledge of your business and someone you trust, they must also be readily available to make decisions on your behalf quickly. You can put a limit on how much authority they have. We also advise you informing all key contacts inside and outside of your business know of the person you have chosen to delegate to.
Our team can help you do this formally through a Property and Finance Lasting Power of Attorney, this is especially important if they will need to contact people outside of your business.
Partnerships
Absence within partnerships may cause less of a problem, due to the fact that there will be other partners to keep things going.
However, a proper partnership agreement is something that we advise to have in place. It will set out the actions or decisions that need full partner or minority partner agreement.
This is important to put in place as when circumstances change and decisions need to be made quickly, without all partners there, many partners may begin to reconsider their governance and decision making process.
However, many partnerships allow for partners to notify decisions by proxy, which alleviates many of the problems. Yet it is important to remember that sometimes partners may not be able to vote by proxy, especially where absence due to illness is present.
Shareholders & Directors
Shareholders and directors may want to think about how to delegate actions and decisions temporarily. In many ways their position is similar to that of a partner, except that their duties and powers are set out in the memorandum and articles of associations of a company. Their powers may also include the right to appoint an alternate director to act on behalf of an absent director or to appoint a proxy to vote in shareholder meetings. Limited companies as a legal entity in their own right often have the power to appoint an attorney to execute legal documents on their behalf.
An LPA can be used to facilitate actions and decisions needed in temporary absences. Certain responsibilities and duties held as a director cannot be delegated as they are personal to the individual.
Individual businesses will have their own structures and needs, our team are still working from home and are able to help you with any of the above issues and the best route for you to take. Individual businesses will have their own structures and needs, our team are still working from home and are able to help you with any of the above issues and the best route for you to take. Please click here to get in contact with us.
