29 Days Before your Business collapses.

29 Days before your business collapses – The life expectancy of any business can be as short as 29 days, does that surprise you? All it takes is for one of the partners or Directors to be involved in a car crash and end up in intensive care or a coma. Or perhaps to suffer from a heart attack or worse!

It’ll never happen to me?

We all tend to be over optimistic about weighing the odds of bad things happening to us, that’s because most of us live in a bubble, so we’re safe from the bad things that happen to other people.


Psychologists call it unrealistic comparative optimism. What that means is that we tell ourselves things like, “I’m a better driver than everyone else, so I’ll never get in an accident,” or ” Serves my neighbour right, I warned him to replace those dodgy roof tiles, I would have.”

Of course, I’m not suggesting we adopt a pessimistic attitude, just that we consider the statistics*. Then maybe we can avoid thinking that this will never happen to us. Life can change faster than we think, and assuming we’re safe, can lead to financial disaster.

If the business has not made arrangements for someone to step in and then have the legal authority to act on behalf of the owner of the company – what’s going to happen?

It only takes one Director or Partner to have failed to set up a Lasting Power of Attorney.  Then the staff and creditors do not get paid, loans default and rent or mortgages go into arrears. After 28 days, creditors can apply to Court – so one day later the business could be gone.

The Mental Health (Discrimination) Act 2013 now necessitates that individuals involved in businesses, whether Directors, Partners or Sole Traders should have in place Business Lasting Powers of Attorney (LPAs.)

Under the Act, mentally incapable Directors, Partners, and business owners are no longer removed if they lack mental capacity, either long term or temporarily. This brings a whole new meaning to – you don’t have to be crazy to work here, but it helps.

Lasting Powers of Attorney for Business

Business LPA’s solve that problem. An LPA is a legal document that enables a selected person, or persons, to act on behalf of an individual who is mentally or physically unable to do it themselves or to act in the stead of that Director, Partner or Sole Trader.

A lack of knowledge under the new legislation is putting businesses at risk of being left in limbo or going under. People tend to think things like this will never happen to them or they must be old before they suffer a debilitating illness, but business people are no more immune to injury or illness than the rest of us.

I am a former athlete, so naturally, over the years have maintained my fitness, so I was shocked to discover that I had cancer some five years ago.  Fortunately, I have made a full recovery since.

Accidents and illnesses that leave people incapacitated or hospitalised for extended periods, can strike at any time and any age, over 22,660 people were seriously injured in road traffic accidents last year and over 13,000 people in England and Wales under retirement age suffer a stroke each year.

Directors and Partners have a duty to act responsibly (s172 (1) & 174 Company Act 2006) and you may be in breach of this if you did not consider putting an LPA in place to cover a possible eventuality that would have a significant detriment on their colleagues, staff and business operation.

Allowable taxable expense

The good news is that creating these LPAs is an allowable taxable expense so it would make sense to take advice on this issue and safeguard your business. This is particularly relevant if you are not only a Director but a Director owning shares in your own company.

Many business owners have spent a lifetime building up their own business, so to see it all turn to dust, simply for not spending the time to prepare and protect their business must be upsetting, not just for them, but for their employees and family.

Should you wish to arrange a meeting to provide you with further information in relation to Business LPAs, answer any queries that you may have and explore ways that we may work together in the future for the benefit of your business then please do not hesitate to contact our specialist team by clicking HERE.


*(see attached slides).

Ray Best is a resilient Financial Planner with a unique approach to investment planning, his work ethic has propelled him from humble beginnings to be voted as a top UK Financial Planner by Vouched For (as published in the Sunday Times). These days he works with families with large investment portfolios or big inheritance tax liabilities, the first step, is to book a Discovery Meeting HERE.

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