As a business owner it is very important to consider what would happen to the day to day running of your business if you were not able to make decisions. This could be because of incapacity; being diagnosed with an illness or having had an accident or simply being unavailable because you are out of the country for a length of time.
If any of these situations were to arise and you didn’t have a Lasting Power of Attorney in place, an application would have to be made to the Court of Protection. This is an expensive process and lengthy, taking usually in the region of 4 – 6 months and in the meantime, no one would be able to make those important decisions on your behalf which could cause havoc for your business. Also, the Court could appoint someone to act for you who you would not have chosen for the role.
Making a business Lasting Power of Attorney provides protection for your business as you are able to appoint trusted people to act as your attorney if necessary.
Many business owners will already have Lasting Powers of Attorney in place to cover their personal finance and property and also for health matters, often appointing spouses and children. Our relatives of course may not be suitably qualified to make important business decisions if they are not involved in the running of the business. It is possible to have more than one Finance and Property Lasting Power of Attorney, one for personal financial matters and one for business interests and it is important to appoint the most appropriate people for each position. Each document should contain specific detailed instructions for the attorney to ensure there is no confusion as to their role.
A business LPA is suitable for different types of business: –
- Sole Traders – The business is not legally separate from the owner and the owner not being able to make decisions could have a devastating impact on the business. Not having a business LPA can mean the business is exposed to risk.
- Partnerships – Some partnership agreements may already deal with the issue of incapacity but it is sensible to check and if not to seek professional advice on putting a business LPA in place
- Directors of Companies – Directors of companies should check their Articles of Association and take professional advice. It may be that all the Directors should consider making a business Lasting power of Attorney.
To ensure that there is no disruption to the smooth running of your business you should give serious consideration to putting a Business Lasting Power of Attorney in place. The document once completed and registered with the court would mean that if the need arose your attorney could continue to pay wages, place orders, pay suppliers, fulfil contracts etc.
Our private client team will be able to prepare the tailored documents appropriate for your business. Please contact Jill Waddington on 01457 761320 to arrange a convenient appointment to discuss further.
