Sarah Ediss FCA
- Accounts and Audit Partner
- +44 (0)330 124 1399
- Email Sarah[email protected]
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As an entrepreneur and business owner, it is crucial to put provisions in place to protect your business. Have you thought about what might happen, in the worst-case scenario, if you were to become incapacitated or die? No one is immune to health risk. Mental capacity can be lost in a multitude of ways, for example through illness or injury, and may seriously affect your ability to make decisions.
If your company has only one shareholder and director, and that person dies, contingency planning is even more crucial. There can be real practical problems in ensuring that your company can continue to trade. For example, it may have only one bank signatory and therefore payment of suppliers and employees won’t be able to be authorised. Your business may stop being able to function and performance can deteriorate very quickly – resulting in a significant loss in value.
You may have previously considered this issue and have arranged informal plans to deal with this scenario: but this is not sufficient in the eyes of the law. If the worst happens, the company needs someone with the necessary authority to take over the day to day running of the business.
Some key points to consider are listed below.
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