B4 Issue 61 - Business As A Force For Good Edition

Page 93

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Shipla Khanum

Tales of the Unexpected Laura McDonagh

Although companies are considering their business succession planning more than ever, data from the National Association of Corporate Directors shows 37% of companies are still leaving it to chance. This is because they have not formalised their continuity plans in case of a sudden CEO departure. Written by: Shipla Khanum & Laura McDonagh, Solicitors at Gardner Leader

Through strategic succession planning, learn how your business can stay at the helm. What follows is a real life case study that highlights the importance of considering succession planning. Last year, a business owner unexpectedly suffered a serious illness that left them in a persistent vegetative state. They were the sole director and shareholder of their business, employed several people, and were negotiating a contract for its sale. Being a sole director, there was no one with the authority to continue negotiating the sale contract, or access the business accounts to pay rent or salaries. In this situation, an order to appoint a deputy was required and an application to the Court of Protection was made. A deputy is a person appointed by the Court to make decisions on behalf of a person who has lost capacity. The Court took several months to complete the application, during which time the business was vulnerable, and the sale could not progress. With some forward planning, you could avoid this happening to your business. Where you are running a business with one or more individuals you should consider having in place a shareholders’ agreement or partnership agreement. This could cover an option for the existing partners or shareholders to buy your interest in the business should you lose capacity or die. A sole director/shareholder should review the company’s constitution and consider implementing provisions that allow your personal representatives to appoint a director so that day-to-day duties can continue if you were to pass away. In addition, you should consider putting in place a

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Lasting Power of Attorney (LPA). An LPA is a legal document through which you authorise a trusted person to make certain business decisions on your behalf if you lose your capacity. This document can ensure the continuity of your business in the event that you lose mental or physical capacity, either permanently or temporarily. It is important to note that the LPA will not prevent you from taking back control of your business as soon as you have

...Your Will can “ grant others positive authority to carry on the business after your death, if this is your intention

regained capacity. In our example above, if they put an LPA in place to appoint someone to manage their business and financial affairs, an order to appoint a deputy would not have been necessary. If you are a sole trader and you die without making a Will, then the people appointed to administer your estate will not have any power to continue running your business, other than for a short while to preserve the assets for sale. It is therefore important to consider what you would like to happen to your business in the event of your death, especially if you would like someone to continue running it. Your Will can grant others positive authority to carry on the business after your death, if this is your intention.

Whilst selling your business may be your retirement plan, you should always ensure that you have in place the following: • written documentation for key relationships for example with your customers, suppliers and employees; • all intellectual property is owned by the business and not by you personally; • well maintained premises and equipment; • accessible records and information systems; • up to date regulatory consents; • a Lasting Power of Attorney; and • a Will. Gardner Leader can assist you with business succession planning along with other considerations such as tax saving measures that may apply. Shipla Khanum Solicitor – Corporate Commercial T: 01628 502442 E: s.khanum@gardner-leader.co.uk Laura McDonagh Solicitor – Inheritance Protection T: 01628 502440 E: l.mcdonagh@gardner-leader.co.uk

 01628 671 636  www.gardner-leader.co.uk

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Articles inside

Twin Town Challenge News

16min
pages 125-132

Spiced Roots

6min
pages 122-124

Taking on the Lost City

4min
pages 120-121

Smart Homes and Supply Chains

11min
pages 104-108

The Kingham Wow

5min
pages 118-119

Introducing Charlotte Gridley

9min
pages 114-117

Winning the War for Talent

5min
pages 101-103

New Identity for 10th Anniversary

5min
pages 109-113

Diane Wilkinson

1min
page 100

O xford’s Place in the Global Market

5min
pages 98-99

Freethinking Approach to Separation

4min
pages 94-96

Immigration Specialist to Support O xford Market

1min
page 97

SME Growth and Oxfordshire’s Economy

5min
pages 86-88

T ales of the Unexpected

3min
page 93

Do You Need a Hospitality Hero?

6min
pages 89-92

Oxfordshire’s Business Community, Take Note

13min
pages 82-85

Protecting Business Ideas From Being Stolen

5min
pages 76-77

Considering Profit Extraction

2min
pages 78-81

The latest commercial properties from VSL & Partners

10min
pages 68-74

Does Your Payroll Comply?

2min
page 75

A Sustainable V enue

5min
pages 66-67

Food as a Force for Good

3min
page 63

Be Socially and Environmentally Conscious

4min
pages 64-65

Charity , Community and CSR

3min
pages 60-62

Ethical I.T . Recycling

3min
pages 58-59

Sobell House Hospice News

3min
page 57

Cowley Road Carnival News

3min
page 56

L earning Support

3min
page 55

6 0 Years of Achievements

3min
pages 53-54

Colette Norbury

1min
page 50

Helping the Formerly Homeless

3min
pages 51-52

Creating a SpecialEffect

3min
page 49

Investing in O xfordshire

2min
page 45

Combating Loneliness

2min
pages 43-44

Four W ays to Help

4min
pages 46-48

Charity of the Year

4min
pages 34-35

T-Winning

27min
pages 24-33

B4 Member News

22min
pages 14-22

The Best of Both

4min
pages 40-42

Saving a Fine View

2min
page 39

NEXUS Introduction Event Recap

2min
page 23

From Waste to (Social) Wealth

6min
pages 36-38
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