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What would happen if you were incapacitated for 30 days? Would your business thrive without you, or would it grind to a halt? A vendor invoice needs sign-off. A lease renewal requires an authorized signature. A key customer sends a contract amendment that needs a response. A bank transaction exceeds the threshold that requires two signatures. A dispute lands that needs legal instruction.

Who handles it? More precisely, who is legally permitted to handle it? And if no one is, what breaks while it waits?

The question is not whether someone else could do the work. It is whether anyone else has the legal authority to do it.

Answer the ten questions below honestly. Each unchecked item is a place where the business currently depends on you personally, and where a buyer, or a 30-day absence, would find friction.

Self-Assessment

The Owner Dependence Audit

Answer honestly. Each unchecked item is a place where the business currently depends on you personally, and where a buyer, or a 30-day absence, would find friction.

I am not the only authorized signatory on the company's bank mandate.
There is a documented delegation of signing authority for contracts and day-to-day decisions, and at least one other person is trained to use it.
No single customer represents an outsized share of revenue based on their relationship with me personally rather than with the business.
If you're not sure, that's worth flagging on its own.
I have reviewed my major contracts for change of control or key person clauses, and none allow the other party to terminate or renegotiate if I leave the business.
At least one other person besides me has direct relationships with our top customers and suppliers, not just familiarity with the accounts.
Our shareholder agreement and corporate charter are current, and they clearly say who can call a board meeting and what counts as quorum if I'm unavailable.
There is a named person, besides me, who is authorized and prepared to act on time-sensitive matters if I am unreachable.
Key operational knowledge, vendor relationships, and institutional history live in documented systems, not only in my head.
I have a continuing power of attorney in place that lets a named person act on my shares and authority if I become incapacitated, not just unavailable.
I have tested, even informally, what would actually happen if I were unreachable for 30 days starting today.
This self-assessment is for informational purposes only and does not constitute legal advice. Results do not create a solicitor-client relationship.

If you felt even a moment of uncertainty answering these questions, that uncertainty is the answer. Most founders who think carefully about this realize they are more deeply embedded in the legal mechanics of their business than they assumed. That is not a character flaw, it is the natural result of building a business where speed mattered more than process. But the time to fix it is before the 30 days happen, not during.

Not sure where your gaps are?

A corporate readiness review starts with a conversation. Reach out to talk through where your business stands and what makes sense to address.

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Common Questions About Owner Dependence

What is owner dependence risk in a business sale?

Owner dependence risk is the degree to which a business relies on its owner personally to keep operating: signing authority, key customer relationships, institutional knowledge, and decision-making power. Buyers price this risk directly. A business that visibly depends on one person is worth less, and is harder to finance, than one that can run without them in the room.

How do buyers actually test for owner dependence during diligence?

Buyers and their counsel look at signing authority on contracts and bank accounts, customer concentration tied to personal relationships rather than the business, change of control clauses in major agreements, and whether key knowledge is documented or lives only with the owner. They will also ask directly what happens if the owner is unavailable for an extended period.

Can owner dependence gaps actually be fixed, or do they take years?

Most gaps are fixable in weeks, not years. Updating a banking mandate, documenting delegation of signing authority, and refreshing a shareholder agreement are all matters of paperwork and process once someone identifies what needs to change. The harder part is usually recognizing the gaps exist in the first place, which is what this audit is for.

Is this only relevant if I'm planning to sell my business?

No. The same gaps that concern a buyer in due diligence are the gaps that cause real operational problems if you're unexpectedly unavailable, whether from illness, a family emergency, or simply being consumed by a deal process. Fixing owner dependence protects the business whether or not a sale is on the horizon.