How can I manage the succession of our family business?

A reader of the Financial Times is concerned about how to manage the succession of their family business. Their mother is currently the sole director-shareholder of the business, however she has early onset dementia and her health is rapidly deteriorating. As such, they want to know the best course of action to take.

Owen Byrne, legal director in BDB Pitmans’ private wealth team, highlights the importance of seeking legal advice on this matter, explaining:

‘The risk for a company of mental incapacity striking a sole director shareholder who has not put the requisite planning in place is total paralysis: no governance and direction for the staff; the inability to do business essentials such as entering into (or getting out of) contracts, recruiting, banking, accounting and in such politically uncertain times, the ability to alter the company’s business plans in the face of turbulent market circumstances. Such paralysis can be avoided by making an LPA for her property and financial affairs. Some business owners will make one for their general (say, domestic) finances and a separate one for their business activities, appointing separate attorneys.’

The full article is available to subscribers of the Financial Times, here.