Lasting Powers of Attorney for your business28/09/2020
To protect your interests, and those of your business, you should consider making a business LPA.
Many will be aware of Lasting Powers of Attorney (LPA’s) and the part they play in helping your loved ones to manage your financial affairs and care requirements if you reach a stage where you are not able to do this yourself.
What is less well-known however, is the use of LPA’s to protect the interests of business owners and their companies. It is critically important to consider what would happen to your business if you were unable to make decisions.
Have you ever thought about what would happen to your business if you lost mental capacity? Unfortunately, anyone could lose the ability to make decisions independently due to serious illness or an accident.
There is no automatic right to deal with another person’s affairs, whether in a personal or business capacity. The disruption to your business could be disastrous if you have not appointed an attorney. Business LPAs can appoint one or more ‘Business Guardians’ who can oversee the running of the business for a short or extended period.
Can you imagine – no one would be able to sign documents on your behalf, no one could access your bank accounts, no one could authorise staff payments or pay suppliers, the list goes on! It would be wrong to assume that a family member or a business colleague would have the authority to make decisions on your behalf and this could leave your business exposed to risk.
Shareholders, partners and sole traders are some of the most common business owners who can benefit from appointing an attorney. Although partnerships will be subject to a Partnership Agreement, in order to avoid a potentially difficult situation in circumstances where a partner lacks mental capacity, the partners should all think about putting in place a business lasting power of attorney.
This is something you cannot afford not to do. The implications of not appointing a business attorney could be catastrophic for your business. If you were to lose mental capacity (without having made an LPA) , it would be necessary for someone to make an application to the Court of Protection to request that the court appoint them as deputy to make the necessary decisions on your behalf. This process can take several months and is considerably more expensive than making a business LPA.
Business LPAs should be the foundation of a strategic business continuity plan. Our friendly Wills and Probate Team headed by Partner Louise Miller would be delighted to assist. Please contact Louise on 0191 281 6151 or email email@example.com