What Happens To Your Business If You Become Incapacitated?

By Kaitlyn P. Tauber, Esq., Liberty Legacy Law Group

As business owners, we plan for everything — marketing, payroll, taxes, growth. But very few of us plan for what happens if we can’t show up tomorrow.

What if you were in an accident or became seriously ill? Who would have the authority to pay your employees, sign contracts, or access your business accounts?

For many Maryland entrepreneurs, the answer is no one — and that’s a serious problem.

Let’s talk about how incapacity can impact your business and how a few simple legal tools can protect everything you’ve built.

The Hard Truth About Incapacity

We often associate “incapacity” with aging, but the truth is it can happen to anyone — at any time.

A car accident, stroke, or sudden medical emergency can leave you unable to make decisions, sometimes temporarily and sometimes long-term.

If that happens and you don’t have legal documents in place, your business could come to a standstill.

Here’s what that might look like:

• Employees can’t access payroll funds.
• Vendors and clients can’t get answers.
• Rent or insurance payments go unpaid.
• Business accounts are frozen because only you are authorized to use them.

Even a few weeks of inactivity can cause serious damage to your operations, reputation, and cash flow.

Who’s in Charge If You’re Not?

Without a plan, the only way for someone to take over is through a court-appointed guardianship — a slow, expensive, and very public process.

That means your family or business partner in Maryland would have to:

• Petition the court for authority to act on your behalf
• Provide medical evidence of your incapacity
• Wait weeks or months for a hearing
• Possibly face restrictions on what they can do

Meanwhile, your business suffers.

The Power of a Business Incapacity Plan

A business incapacity plan is your safety net. It ensures your company keeps running smoothly, even if you can’t be there to manage it.

Here’s what it typically includes:

1. Durable Power of Attorney (Financial)
   Appoints someone you trust to manage your finances and business operations if you’re incapacitated. This should be customized for business use — not a generic online form.
2. Operating Agreement or Bylaws
   These internal documents should clearly define what happens if an owner or partner becomes incapacitated. Without this clarity, disputes can arise.
3. Business Succession Plan
   Identify who will step in temporarily — or permanently — to make key decisions. This can include employees, co-owners, or outside professionals.
4. Buy-Sell Agreement
   If you have business partners, this agreement determines what happens if one of you can no longer work. It prevents confusion or unwanted ownership transfers.
5. Key Person Insurance
   Provides funds to the business if a vital team member (like you) is unable to work due to injury or illness. It can cover expenses and protect the company during the transition.

Why Maryland Businesses Need to Act Now

Maryland’s legal process for handling incapacity is not fast — and it’s not designed for running a business.

If you’re a small business owner or part of a family-run company, there’s often no separation between your personal finances and your business assets. That makes planning even more critical.

By setting up the right documents today, you can ensure:

• Bills and payroll are paid on time
• Clients stay informed and confident
• Your family isn’t dragged into court
• Your company survives a temporary or permanent absence

How Liberty Legacy Law Group Helps Business Owners

At Liberty Legacy Law Group, we help Maryland business owners protect their livelihoods from life’s unexpected turns.

We create customized plans that:

• Appoint trustworthy decision-makers
• Integrate your business plan with your personal estate plan
• Review your LLC or corporate documents for incapacity clauses
• Prepare durable powers of attorney tailored for business operations

We understand how deeply personal your business is — and how much peace it brings to know it will be protected no matter what happens.

Final Thoughts

You’ve worked hard to build your business. Don’t let an unexpected event undo that progress.

A few hours of planning today can save your family and team months of stress and financial loss tomorrow.

At Liberty Legacy Law Group, we help Maryland business owners protect their people, property, and purpose — even when life throws a curveball.

Because your business isn’t just your income. It’s your legacy. Reach out to us today!