At the time of writing, BREXIT is due to take effect on 29 March 2019 and discussions over the outcome of a deal or no deal are ongoing. Reports have indicated that the agricultural community may be one of the hardest hit following a no deal BREXIT – with indications that land prices may drop, the workforce will be hit hard and exports may be made more difficult.
It is of course not the first time the farming community has been confronted with very real concerns over exports, the foot and mouth epidemic being the most harrowing in my recollection. As we read of contingency plans being put in place by Governments across the UK and Europe, it is important that farmers and land owners also consider the future of their business.
With this in mind, what does the future of your business look like? The first consideration which comes to mind is succession. Succession planning takes many forms and will often include the review of your Will alongside a review of your business structure. Reviewing your business structure – whether you choose to formalise a family partnership, review your articles of association or change your business structure entirely, ensures the next generation is adequately equipped to deal with the challenges they may face in the future.
As part of any review of your business, consideration should also be given to the ownership of property and any entitlements. Will your land and property form part of your business or not? Consideration should also be given to the succession of tenancies and particularly protected tenancies under the Agricultural Holdings Act 1986.
Yet even with these best laid plans, there are further opportunities to protect your business. For instance you may wish to appoint someone to have power to take care of your financial affairs if you become unable to do so in the future. Whether by illness or injury, the incapacity of a business owner can put you at risk of losing control of your business. Whilst such issues can be addressed in a formal Partnership Agreement (or articles of association for a Company), there is no automatic legal right for another to take charge of your business affairs if you are unable to do so. In such circumstances, the contingency would be preparing a Lasting Power of Attorney (“LPA”).
A LPA is a legal document which allows you to appoint someone to make certain decisions on your behalf. There are two types of LPA, one concerning health decisions and once concerning financial decisions. A separate document can also be prepared nominating someone to deal particularly with your business affairs if you are unable to do so or with your consent. By preparing in advance for potential issues in the future, you are able to influence who will be responsible for making decisions on your behalf and on behalf of your business.
Whilst there are legitimate concerns about the year to come, there are of course also opportunities. Beginning the year with a plan for the future is as good place to start as any.
For more information on any of the above, please contact Alison Hall, or call 0191 232 8345.