When Life Pauses, Business Shouldn’t.
Most business owners plan for the future, but few plan for what happens if they are still here and unable to lead. Illness, injury, or sudden cognitive decline can happen without warning. When it does, the question becomes simple: who keeps the business running when you cannot?
Without a plan, the answer is often no one. If your name is the only one on the company’s bank account, payroll can stop. Contracts that need your signature remain unsigned. CRA filings or supplier payments might fall behind. Family members or colleagues do not automatically have the right to make decisions or access accounts.
In British Columbia, your loved ones may need to go through a court process called a committee ship, which is costly and slow. While that unfolds, your company can sit in limbo.
We have seen this play out at every level. In the television series Succession, Logan Roy’s sudden stroke throws his billion-dollar empire into confusion because no one knows who is really in charge. The same thing happens in real life when founders do not formalize who steps in. What begins as a personal crisis can quickly turn into a business one.
The Role of a Power of Attorney
A Power of Attorney allows someone to manage your financial and legal affairs when you cannot. A general Power of Attorney stops working if you lose mental capacity, while an enduring Power of Attorney continues to be valid. That distinction is critical.
An enduring Power of Attorney allows someone you trust to handle your personal finances, pay bills, and manage your shares in the company. But it does not automatically give them authority to run the business.
They can vote your shares to elect a new director, but they cannot act as one until that happens. In other words, a personal Power of Attorney covers your personal assets, not the daily operations of your business.
To protect both sides, you need a personal plan and a business plan that work together.
Keeping the Business Running
When a business relies on one person for signatures or approvals, even a short absence can create serious problems. Setting up clear backup authority prevents disruption.
Corporate Power of Attorney: Allows a trusted person to handle certain company matters, like signing contracts or managing banking.
Advance Director or Officer Resolutions: Pre-appoint someone
who automatically steps in if you become incapacitated.
Shareholder Agreements: For multi-owner businesses, define what happens if a partner cannot continue, including buyout terms or temporary decision-making authority.
Everyday Policies: Add a secondary signing officer, document passwords and key contacts, and communicate who has authority in an emergency.
That kind of preparation is what allowed Wendy’s to remain steady when its founder, Dave Thomas, became ill in the early 2000s. His succession and management structures were already clear, so the company never lost direction or credibility with the public.
Financial Stability Through Insurance
Legal authority is one piece of the puzzle. Financial stability is another.
Key person disability insurance provides income for the business if a key owner or employee cannot work due to illness or injury. It helps cover payroll, rent, and operating expenses while the company adjusts.
Disability buyout insurance provides funds for the remaining owners to buy out an incapacitated partner’s shares, ensuring fairness for both sides and avoiding financial strain.
Together, these forms of coverage create a safety net that supports both the individual and the business during difficult times.
Communication Matters
A plan only works if people know it exists. Your management team should know who will take charge if something happens. Your family should understand your wishes and who to contact.
Key clients, vendors, and lenders should hear clear communication that the business will continue operating as planned.
Being transparent and prepared builds confidence. It reassures the people who rely on you that even in a crisis, the company will remain steady.
Moving Forward with Confidence
Planning for incapacity is not something most entrepreneurs want to think about, but it is one of the most important forms of protection you can put in place.
It preserves the value of your business, supports your employees, and reduces stress for your family.
Creating an enduring Power of Attorney, establishing corporate backups, and maintaining the right insurance coverage ensures that your business will keep running even if you cannot. It is not only a legal strategy, but an act of care and leadership.
Because no one can predict the future, but every business owner can plan for it.
To get started with incapacity planning, you can book an online consultation or reach out to our team at your convenience.
We’ll walk you through the key considerations, outline the planning options available to you, and answer any questions to help ensure your business and personal affairs are protected if the unexpected occurs.
