Reducing the Covid-positive risk to business
Vincents’ Lisa Lodge talks to us about protecting your business with an LPA.
Reducing the Covid-positive risk to business
Since the start of this pandemic I’ve had some very worried phone calls from business owners.
Today it was “What happens to my business if I contract Covid?
“How do I pay the bills, my staff, my suppliers if I’m on a ventilator or worse?”
Can you help?
Well there is a straightforward solution which I can tell you about right now. Since the advent of Covid-19, I have received more instructions than ever for Lasting Powers of Attorney for Business. This has increased particularly as our understanding of the illness has grown; how a serious case can land someone in hospital for long periods, leaving them almost entirely incapacitated. And then there’s the prospect of Long Covid, which is preventing people from getting back to full fitness for an extended period of time even once the infection has passed.
These are the serious repercussions of becoming infected which people didn’t really consider at the start of the pandemic when it was assumed you either died or got better and there wasn’t much in between. Now we know differently of course, and many of us know someone who has had this awful illness and seen first-hand how it can affect them.
Lasting Powers of Attorney
Most businesses will have succession plans in place for if a senior person or owner dies, but these are likely to be permanent changes made to the structure or management of the business. What clients are looking for with an LPA is a temporary arrangement which see the business looked during that incapacitation, but is reversable when the person is well enough to resume their role. This is eminently sensible and shows due diligence and consideration for your fellow business partners, directors, staff and suppliers.
For example, one small business owner realised that if she wasn’t able to authorise the payroll for her small team of employees, because she had suddenly been taken ill, this would leave staff out of pocket as she’s the only one with the ability to make the authorisation. She has decided to appoint her husband as her business attorney, so that he could carry on paying her staff and the overheads for her small high street business if she was unable to. But she knows her husband would be unable to look after the business on a day-to-day basis as he has his own job, so she would need to make a separate provision for that.
She has chosen a valued and longstanding employee who knows the business inside out. This individual would be authorised and instructed run the business on the owner’s behalf to help ensure would indeed be a business to return to after her recovery. Within the business LPA, I was able to detail quite complex instructions as to who would be in charge day-to-day, outlining the responsibilities they would hold and what they would be able to authorise on her behalf. We then made a separate provision for who would hold the financial functions such as paying the bills, liaising with her accountant and the Inland Revenue.
The instructions can be as complex or as straightforward as a business owner likes, I can advise you on the full scope of the business LPA and detail your wishes exactly, including the provisions and criteria for your return to the business. And LPAs are not only crucial for SMEs but also for larger organisations. Your company may have made provision via its Articles of Association, but don’t presume so. This needs careful scrutiny and I, along with our commercial team, can advise on this specialist area.
It is important to act soon to arrange your LPA for Business, please contact our experienced, professional and supportive private client team on 01772 555 176 or email Lisa Lodge directly on LisaLodge@vslaw.co.uk