Roythornes blogs
Roythornes Blogs
Roythornes Spalding office
Roythornes Spalding Offices
News and Events

It's ok , Geoff'll sort it out...

View profile for Robert Webb
  • Posted
  • Author

As anyone involved in the agricultural sector knows, significant problems can very quickly arise through absence from the ‘hands-on’ business. Thankfully, such absences are usually short-term and although there is a noticeable effect in terms of labour, the paperwork can generally be caught up with during recuperation, or at least put on the back burner.

For most of us, we’re lucky enough to have a family member who is able to help out during those more difficult times or, failing that, a business partner or friend who is happy to lend a hand to get us through the worst. Although such informality can be of assistance in the short term it’s no use when health issues are more prolonged and it must be borne in mind that these agreements don’t hold water from a legal perspective.

When it’s time to consider business continuity, it is easy to focus on the succession issues that follow death or retirement, although long-term incapacity is often overlooked, notwithstanding that there are currently over 40,000 people in the UK suffering with young-onset dementia ( Alzheimer’s Society ). That’s certainly not the only risk of sudden incapacity however.

We certainly get asked how these issues are going to be dealt with at the time they arise but, unfortunately, it can often be too late for any power of attorney arrangement to be put in place and the only recourse is an application to the Court of Protection, requesting the appointment of a Deputy. This is the start of a long and expensive process.

When advising our business clients we ensure that long-term incapacity is something that is discussed and considered and this should be seen as a key issue for any person in business, whether that is a sole trader, company director or partner. If you think this is something to worry about only in later life, consider this:-

It’s early October, you’re currently lifting sugar beet and it’s been one of those days you’d rather forget. You’re rushing through the yard when you get home because you know you need to get in and finalise the paperwork that’s been sat there all week…you trip and fall and bang your head, badly. The next day you’re stable in hospital, but you’ve been left with a significant brain injury and won’t be working for the foreseeable future, so…

  • Who is going to make key decisions and finalise the contract negotiations you’ve been dealing with for three months?
  • Who is going to deal with the suppliers next week?
  • Who is going to deal with the insurance renewals?
  • How is this going to affect your employees?

Although the willing family member, colleague or friend will be there, they will need legal authority to deal with the issues above, so it’s imperative a formal legal authority is in place such as a Lasting Power of Attorney ( LPA ) or specifically, what is commonly referred to as a commercial LPA.

These documents can run in tandem with any personal LPA , allowing your family to make decisions about your personal affairs and for your business colleagues and advisers to make decisions in respect of the business going forward. This plays to the strengths of those concerned and helps to ensure continued success and longevity for the business.

Hopefully, such a document would never be required and it will be a case of simply revoking the commercial LPAwhen you retire.

We know that each and every business is different and believe that there is no “one size fits all” when these documents are considered. When we consider business succession/continuity we will really get to know you and your business in order to ensure that the documents prepared are sufficient in scope to complement both short and long-term aims. Remember too that consideration will of course need to be given to the Articles of Association or any Shareholders or Partnership agreement which may prescribe the options available in the case of incapacity.