This is not about horror stories, of which we know plenty. It is solely about the question of how you prepare your company for future developments and for the imponderables of life. Succession is not only the planned end of your entrepreneurial activity, but also the abrupt, hopefully temporary absence of an entrepreneur. Preparing for the worst case follows from your responsibility towards your company's ecosystem, even if it will hopefully never occur.
Playing it safe: securing the ability to act
The famous emergency folder falls far too short, of course. Your company has to be able to act when you are unavailable. Having all the important documents in place can be organised well in the digital age, and rules on representation are a firm part of the organisation. What is often overlooked is the levels at which the managing shareholder of a company takes decisions. The ability to act has to exist at management level just as much as at shareholder level, and it has to be aligned with your company's articles of association.
Defining the role creates clarity
As an entrepreneur you have at least two roles: you are management and you are owner or shareholder. If there is another member of the management in the company, the business is able to act provided that person has the corresponding authority to represent it.
The shareholders' meeting, by contrast, may not be able to act when you are unavailable. Or decisions are taken in which you, as a shareholder, have no vote because you are not present. The effects can be manifold. If you have defined transactions requiring approval, for instance, that approval could not be given and management would be limited in its ability to act.
An entrepreneur's power of attorney: let others act when you cannot
You can shape the possible effects on the shareholders' meeting to a certain extent. With an entrepreneur's power of attorney you can have yourself represented. That way you make sure your company's shareholders' meeting remains able to act and that your interests are protected. Settling this in advance helps your family, because you have defined a framework for action. The entrepreneur's power of attorney and the arrangements for remaining able to act in an emergency are to a certain extent a legal matter. The decisive questions are entrepreneurial and organisational in nature, and the legal implementation follows from them.
Preparation and implementation
THE MAK'ED TEAM knows the questions that arise when setting up emergency concepts. Even though the objectives of such concepts are always the same, every company and every company constellation is different. A structured approach is therefore advisable in order to establish an emergency concept that takes account of the important interests of you, your company and your family. Experience shows that this can be a good basis for developing it further into a succession concept.
You can find more on succession and emergency planning here.
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