Lasting Powers of Attorney for Business Owners
Have you ever wondered what would happen to your business if you were to become incapable of running your business through injury or illness?
Having a Business LPA in place may need to be a key element of your risk management strategy, whether you are in business as a sole trader or through a company or partnership.
Close family or colleagues do not have an automatic right to step in to deal with employees, contracts or business accounts if an owner becomes mentally incapable of running your business. Without an LPA in place it may be necessary to apply to the Court of Protection to appoint a Deputy to act on your behalf. This is a comparatively expensive process which typically takes several months, a delay which could prove damaging to your business.
It makes sense for a sole business owner to put an LPA in place so that the business can continue to operate in this situation. Provided that the LPA has been registered in advance with the Office of Public Guardian, the attorney(s) appointed by the LPA would be able to take over the reins on behalf of the owner right away in the event of incapacity, acting in the owner’s best interests and in accordance with any guidance or directions which the owner has given.
The same may well also apply to partners or company directors – with these business structures, a first step is to check whether the partnership agreement or articles of association contain comprehensive, suitable arrangements taking into account your developing business requirements and contingency plans. In companies and partnerships, a Business LPA may play a role in these arrangements.
You should choose an attorney whom you trust with the necessary adequate skills to deal with the day to day running of your business, including making payments, signing cheques, paying staff wages and servicing business loans whilst you are unable to do so yourself. It is possible to appoint different attorneys under separate LPAs to manage your business affairs as distinct from your personal property and financial affairs.
When preparing your Business LPA we can also review other documents important to the structure of your business such as company articles of association, shareholder agreements or partnership agreements to ensure these reflect the way your business operates.
If you would like to discuss preparing a Business LPA please contact:
Pardeep Bancil, solicitor
Bill Montague, partner
tel: 0118 939 3999
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.comments powered by Disqus