How can entrepreneurs ensure that someone is available to legally represent their companies to third parties in such cases?
Hans Baumgartner: They should review the signatory authority entered in the commercial register and assign authority to additional individuals to ensure the company's ability to act in case of an emergency. It is also important to ensure access to liquidity. There are various ways to do that – for example, granting additional sole or joint signatory authority for the appropriate accounts.
Désirée von Michaelis: If the company has existing agreements with its owners or shareholders, those contracts should be revised to correspond to the advance directive and last will. One example of this could be rules for removing a deceased shareholder that are not in line with the current estate planning. In any case, it is worthwhile to have all documents reviewed by an expert. That can help avoid negative conditions or contradictory statements based on current planning.
Is an advance directive also part of emergency planning?
Haus Baumgartner: Yes, exactly. That is because it does not only ensure that the business owner's personal interests are represented. It also protects their rights as members of governing bodies and their rights as partners or shareholders in the company.
What other instruments can be used to create an emergency plan?
Désirée von Michaelis: Another example is testamentary disposition. One can be drawn up for various purposes, including to govern succession and ensure business continuity. If necessary, they can be supplemented with corresponding marriage or inheritance contract provisions. Good succession planning is definitely worthwhile.
How else can the owner of a company protect themselves in case of emergency?
Hans Baumgartner: Further precautions as part of an emergency plan include reviewing one's current retirement planning in terms of the first, second, and third pillars. Coverage can be optimized, for example, by improving the pension fund's benefits, adding supplementary accident insurance, and taking out life insurance.
What is your procedure for creating an emergency plan?
Désirée von Michaelis: First of all, we sit down with our clients for a no-commitment discussion to give them some guidance on the various aspects of an emergency plan. Through that, we gain initial insight into the areas that are already covered and where there are gaps. At the client's request, we begin in-depth analysis of their situation and desires and examine their current plans to ensure they are consistent and complete. We compile an organized report for them with the results of our analysis and our recommendations. The client advisor, together with our inheritance, tax, and financial planning experts, are then happy to assist them in correcting any weaknesses in the emergency plan.