Business Lasting Powers of Attorney

Business owners will know there are huge demands on their time and resources and many will have taken steps to ensure that in the event of a crisis, flood, fire, computer hacks etc., they have contingency plans in place to allow the business to carry on functioning as a going concern. However, very few businesses give the same type of consideration to what would happen if one of the key decision makers was incapacitated; how would a business run if one of the key people was unable to make decisions?

You might think you could rely on family members or employees to deal with the running of the business, but they may not have the authority to do this and business colleagues do not automatically gain the authority to make decisions on your behalf.

The solution to this is to put in place a Business Lasting Power of Attorney (LPA). These can be used if the business owner or decision maker:

  • is overseas or on holiday
  • has had an accident that means they are temporarily incapacitated
  • has an incapacitating medical condition that means they are no longer capable of acting

If there is no Business LPA in place an application should be made to the Court of Protection to have a deputy appointed. This may take months or longer, during which time the business is exposed to uncertainty of survival. Therefore, it is always best to have in place a valid business LPA.

Who needs a Business LPA?

  • a sole trader
  • a person who is self-employed
  • a director of a company if a director’s incapacitation is not covered by the articles of association or memorandum of association
  • a partner within a partnership if a partner’s incapacitation is not covered by the articles of association or memorandum of association

A person can have a personal financial LPA, a health and welfare LPA and a Business LPA, but should appoint attorneys that are suitable for each one separately.

A business attorney must be able to carry out the role and be someone suitable to undertake the responsibilities of the donor in a business LPA, and the donor should consider giving specific and detailed instructions on what powers a business attorney would hold.

If you would like further advice on the issue of Business LPA’s then please contact a member of our Private Client team on 01695 574 201 or by email.

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