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Business Owners and Family Businesses

COVID-19 and the uncertainty it is causing presents unique problems for business owners. Ensuring your affairs are in order and keeping people fit and healthy become even more important than normal. For people who run businesses with an international dimension and need to travel regularly, there is an additional layer of complexity.

Many of the considerations you face are, understandably, sensitive and difficult. However, it’s essential that you take every step to protect yourself, your family and your business. Issues like key person insurance, succession planning, shareholder and partnership agreements need to be addressed so that every eventuality is considered and planned for.

Here are five things to consider:

  1. Make sure appropriate shareholder or partnership agreements are in place.
  2. If you have any lasting powers of attorney in place, make sure they have specific provisions for business decisions over and above general financial provisions.
  3. Check that you have key person insurance for all directors and shareholders.
  4. Make sure that business owner wills work in conjunction with the terms of any partnership agreement, articles of association or shareholders agreement.
  5. With financial markets volatile, consider your inheritance tax and capital gains tax position to make sure your interests are protected and as secure as possible.

Frequently Asked Questions

Do I need a separate Lasting Powers of Attorney if I have a shareholding?

Yes, it is usually advisable for a business owner to have separate LPAs to cover their personal financial affairs and their business interests. There are a couple of reasons for this.

The first is that when someone appoints an attorney they should be considering whether that person has the required skill and ability to act in that capacity. This is likely to be very different for personal and business matters.

In addition they need to be considering the impact on and views of other business owners, for example, would they be happy with spouse of an incapacitated business owner stepping in and starting to make decisions regarding the business?

Finally they need to consider that some businesses operate within regulated regimes that require decisions to be made by someone who is also regulated (solicitors, accountants, vets etc.)

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