If you need to delegate the running of your business or are unable to carry out certain duties, you can delegate all the work to a person you trust. Sickness can sometimes mean a long stay at a hospital, plus time for treatment and recovery. Time off can mean physical or mental health healing, but it isn’t necessarily indicative of poor health. It can also mean a sabatical, maternity or paternity leave, or making time to start a new business or project. If you need time away from your business, who would be left in charge? Someone you can trust but it has to be a trustworthy person, capable of managing your affairs.
Think of who is the most trustworthy person to manage your business affairs. Someone with availability, capacity and a skill set that mimics your own. Trust, capacity and availability are not the only points to check. If the person is qualified and agrees to take over your affairs, you need to legally formalise the arrangement or agreement with a power of attorney document. This legal agreement basically holds accountable the person you’ve entrusted with your business. The person you’ve appointed as your attorney, the one who holds the power of attorney, is legally required to observe what is written in the agreement.
The power of attorney will stipulate exactly what responsibilities should be carried out, but it does not override your authority. You have appointed an attorney to make decisions on your behalf. This means that decisions are made with your business interests in mind. When you give power of attorney, you are called the ‘principal’ and your ‘attorney’ represents you. The ‘attorney’ acts on your behalf. If you happen to end up with diminished mental capacity, then your attorney will carry out your affairs in line with your wishes when you were in full mental capacity, and in line with the law.
In the UK, the power of attorney gives the attorney legal status, granted by the principal, who’s nominated a trustworthy person or persons capable of making legal decisions in relation to business, finances and assets. You can opt for one person or two to act on your behalf. If you choose two people for the power of attorney, they can either act ‘jointly – they make decisions together – or ‘jointly and severally’ – they make some decisions together and some independently or individually. Before deciding whether to give power of attorney to one or more people, and whether it should be jointly or jointly and severally, it would be prudent to consult with a business lawyer.
Please get in touch to arrange an initially consultation. We can advise you on various aspects of power of attorney and can help you make an informed decision on who to nominate to manage your business affairs. SG
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