Mental capacity can be lost suddenly through accident or illness, the loss can be temporary or permanent, but in either case the impact on the individual’s business is likely to be severe. If the business is that of a sole trader there will be no one to manage the money, give instructions to staff, or make any decisions of any kind. Employees may try and run things themselves, but in doing so they would be facing personal liability.
The solution is for the sole trader to appoint one or more attorneys under a Lasting Power of Attorney. This would be a Power confined strictly to decisions affecting the business, additional Powers could be created to deal with the personal finances and health and welfare.
These remarks also apply to sole shareholder/directors of limited companies, but in such cases it is necessary to bear in mind the company’s articles of association, as amendments to those may be necessary.