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Hi, I'm Tim Bishop from Bonallack and Bishop and I'd like to have a few words with you about the five essential documents you need for your business.
"Protecting your business -- Five essential documents"
It always amazes me how few business actually get the most basic documents in place, and what are they? Well, I think there's five of them. Firstly, it's a will, a personal will, secondly, a lasting power of attorney, thirdly, it's an up-to date simple terms and conditions, and fourthly and fifthly, depending on the state of your business, its either a shareholders agreement if you're a company or if you're a partnership, it's a written partnership agreement.
"Do I really need a will?"
Absolutely, failing to make an up to date will can create a serious risk to your family and your business partners. For example, you'll need to ensure that your business can run after you die. That your business interests are inherited, with or without the family as you would wish. That your will maximises potentially significant tax savings. That a properly drafted will prevents potentially highly divisive and expensive claims on your estate which can even involve claims against your share of the business. And lastly, that there is adequate succession planning for directors.
"I've got an old will - wont that do?"
It's really not good enough to have your will drafted just once and for all, there's a huge difference perhaps between being a 25 year old, setting up your first business when you're single, to when you're 55, perhaps you're a managing director of a successful company of say 55 employees in a number of locations with children on a second marriage, step children and grandchildren. You wouldn't expect to leave your health without being checked at that age, and you certainly wouldn't want to leave your financial situation without being checked, why should you leave your will unchecked?
"How often should I consider reviewing my will?
You really need to look at your will regularly to see if it adequately covers your circumstances and we recommend that every business owner should do so every five years.
"How will my business operate if I become incapacitated?"
Well if you become incapacitated, unless you take adequate steps and you get a lasting power of attorney in place your business could be in real trouble. No one could really deal with those day to day issues that need running and if you're not careful by the time you actually apply to the court of protection to get those things sorted, your business could be in serious financial trouble. The answer is simple, it's a lasting power of attorney, it's a simple document that you only need to complete once, every business owner really needs one.
"How important are terms and conditions?"
Of all the documents every business needs I think simple clear terms and conditions are the absolute essential ones. If you haven't got that right you could be in all sorts of trouble. It can make a significant difference to your cash flow. It's a simpler step that any business should take, it's simply a no brainer. Make sure you've got good terms and conditions, they're simple they're clear, and they're updated regularly.
"Does my company really need a shareholders agreement?"
Your company doesn't legally need a shareholders agreement but unless you've got one you could be in a really difficult situation. You really don't want somebody else deciding how you run your company, it can become particularly important for example if you have a business bust up or a shareholder dispute, in which case having your own properly drafted shareholder's agreement can make a world of difference. Again, a shareholder's agreement is a simple, relatively cheap document, and can save enormous cost in the long run.
For more info and to get in touch, visit http://www.bishopslaw.co.uk
This video was created by:
Bonallack and Bishop, Solicitors
Rougemont House, Rougemont Close, Salisbury, Wiltshire, SP1 1LY.
Telephone: 01722 422300