The Government first announced plans for a shared ownership right to buy in October 2019. At the time the sector raised concerns about the impact the plans would have on housing associations ability to borrow. An election and a pandemic later the Government announced, during the CIH Housing Festival last week, the return of the right to shared ownership as part of its Affordable Homes Programme (AHP).
But just how often do you stop and reflect on the needs that aren’t externally imposed on you, but are nevertheless just as vital?
Do you have a contingency plan in place to cover your illness or injury? What would happen if you lost capacity and couldn’t oversee your business? Have you considered what happens to your business in the event of your death?
Planning for these possibilities often doesn’t make the ‘to do’ list, but could be vital for the long-term stability of your company, and the employment of your staff.
What should be on the ‘to do’ list?
Here are a few key plans that could save you, your family and your business partners a lot of stress and expense. Plans for your business and its future success should not be considered complete without:
- A well prepared and thought through shareholders agreement;
- Consideration of the full range of insurances your business might need – such as keyman and shareholder protection insurances;
- A Lasting Power of Attorney; and
- A Will.
For businesses where you are not the sole owner, ensuring that there is a good governance system in place to address any shareholder issues – and particularly to whom any shares can be sold or passed to if someone wants to make a gift or dies – are vital. If you have spent a long time building a business with a trusted colleague, you may not want them to be free to move on and sell their shares to anyone they wish. Making sure that you have the first refusal on the sale might be very sensible and can be secured through a good shareholders agreement.
If your business partner were to die, making sure you could buy out their interest in the business might be vital. This would leave their family with cash and you with the control of your business. Appropriate insurances and supporting documentation (often called ‘cross option agreements’) might just save the day for your business. These agreements can prevent financial difficulty if you had to buy out a co-owner and/or avoiding the need to co-own your business with a third party you wouldn’t ordinarily choose.
Lasting Powers of Attorney
If you had an illness or injury, knowing that someone was able to step into your shoes and make key decisions – about your business but also about your personal financial affairs – would be vital. Those decisions could keep your business going, maintaining its reputation and providing you with the opportunity you need to recover.
Through a Lasting Power of Attorney, you choose the person/people to oversee your financial matters – which can be the same person for personal and business affairs, or it might be different people. This depends on who knows you best, and who would be best placed to oversee the business if you weren’t able to.
The alternative is a potentially long drawn out application to the Court of Protection for the appointment of a Deputy to oversee your affairs. The Deputy might not be the person or people you would choose, and the delay could be costly for your business while no one could act on your behalf.
Your business is likely to be one of the most significant assets you own. Where it should pass in the event of your death, and how it will realise best value for your chosen beneficiaries are key things to consider. A Will enables you to carefully consider where your business interests should pass in the event of your death, and also makes use of a number of potentially significant inheritance tax savings that could be made too.
A well-planned Will can save a lot of heartache for all those involved in, or affected by, your estate during an already difficult period. This could ensure that your business and its future are maintained, while also looking after those you love.
This article flags just a few wider considerations for you to think about as a business owner to ensure that your business is as secure as it can be – whatever tomorrow holds. Sometimes the most important things aren’t the ones that make the ‘to do’ list, but looking after yourself and your plans can be vital for the future of your business.
For more information, please contact Donna Holmes.
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