When running a business, it’s important to plan ahead and prepare for whatever life may bring. Since it’s impossible to predict illnesses or accidents, our team of experts can help you put a Business Lasting Powers of Attorney (LPA) in place, protecting the future of your business when life gets a little bumpy.
A Lasting Power of Attorney is a legal document that allows you to appoint someone you trust to make decisions on your behalf, should you lose capacity. The two most well-known types of LPAs are for personal finances and welfare, but what many don’t realise is that you can also have a LPA for business. This will allow an attorney to continue running your business in your absence.
While you may have an understanding with family members or colleagues about who would take over business decisions, without legal documentation, they won’t actually be able to act on your behalf. If you were to lose capacity without a LPA in place that covered your business, your business accounts could be frozen.
Moreover a personal LPA could result in people you don’t want having to become involved in day to day running of a business and be involved in decision making which may lead to higher voting powers and other complexities.
Without a LPA in place an application would need to be made to the Court of Protection to appoint a deputy. This is an expensive and lengthy process, and with your accounts frozen, it could be months before anyone is able to pay your suppliers and employees. When a deputy is finally appointed, not only may your business have suffered, but the courts might also appoint someone you never intended to look after your business.
In contrast, an LPA will give someone you trust the immediate right to act on your behalf. This will give your staff, stakeholders and loved ones peace of mind that your business will continue to run as normal in your absence, whether that be due to illness, loss of capacity, or finally taking that well-deserved holiday.
At Fodens, our specialists will work with you to tailor an LPA specifically to your role within the business. If you have several businesses, then you will likely need a separate LPA for each one although we will be able to discuss this with you. Once we have created your LPA, we will review it at regular intervals to ensure its contents will always be aligned with your business.
When creating your LPA, you will appoint someone you trust to act as your attorney. They will need to have the right level of experience and expertise, such as another partner from your firm. However, if it’s a family business, then it might be best to appoint a solicitor or accountant as your attorney to avoid a conflict of interest.
The document will also provide details about the extent of their powers, and there will be a set of legally binding instructions which they must follow. You can even include a section about your preferences to help them use their powers in a way you would deem suitable.
If you would like to learn more about Business LPAs, then get in touch today and one of our solicitors will talk you through the process. Life might be unpredictable, but we can prepare you for any scenario to help smoothen out the bumps.
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