Our Guest Bloggers ‘Four Oaks Legal Services‘ offer expertise and advice to small businesses about wills and power of attorney for business owners
Can I deal with my Business in my Will?
If you own a business and are considering making a Will, the first thing to consider is how your business is set up.
You may be
- A Sole Trader
- In Partnership
- A Director of a Limited Company
In all cases you need to consider the value of the business and also what liabilities could be incurred by the company. Depending on the overall value of your estate you should look at Inheritance Tax planning as it may be possible to claim tax relief for interests in a business so long as certain criteria are met.
Do I Need A Power of Attorney for My Business?
It’s important for you to consider what would happen to your business if you had an accident and were unable to manage your business for any period of time. If staff and invoices remain unpaid for a period and no one has the authority to act on your behalf then your business may get into difficulty.
A Lasting Power of Attorney (LPA) is a legal document that allows a person (or a number of people) to deal with your affairs if you can’t. It is possible to have separate LPAs if you wish certain individuals to deal with your business decisions and others to act as attorneys for your personal affairs.
Are you in Business with Others?
If you’re in a Partnership or Limited Company with others, you need to ask whether you are able to pass your interest in the business to someone you choose in your Will or appoint an attorney to act for you if you were to be incapacitated or whether the Partnership Agreement or Shareholders’ Agreement sets out what happens to your share.
Importantly you also need to be aware of what would happen should any of your partners or co-directors die or be unable to work in the business. For example if a co-director or partner has appointed their spouse as their attorney or given them their interest in the business under their Will, would you want that spouse to be running the business with you? If you have nothing set out in writing this may be what you’re faced with.
In all cases we recommend that you take legal advice.
At Four Oaks Legal Services we offer expertise and advice to small businesses and individuals in relation to Shareholders’ and Partnership agreements as well as advice relating to Wills and Lasting Powers of Attorney.