As a business owner, there are many important decisions to make to protect your company’s interests. One crucial aspect that often gets overlooked is the implementation of a Business Lasting Power of Attorney (LPA).
A Business LPA allows you to appoint someone you trust to make decisions on your behalf should you become unable to do so yourself. In this blog, we will explore the key factors to consider when setting up a Business LPA.
#1 Understanding the Basics
A Business LPA is a legal document that grants authority to another individual, known as an attorney, to make decisions on your behalf. This can include decisions related to finances, contracts, property, and day-to-day operations of your business. It is important to understand the scope and limitations of a Business LPA before moving forward.
#2 Choosing the Right Attorney(s)
Selecting the right person to act as your attorney is crucial. The chosen individual should be someone you trust implicitly and who understands your business and its operations. Whilst attorneys for a personal LPA are usually close family members, when it comes to business LPAs, it is more likely for the person to be an employee or close business contact. Consider their experience, knowledge, and availability when making your decision. It is also wise to have a backup attorney in case the primary attorney is unable to fulfill their duties. It may also be prudent to inform your chosen attorney of their inclusion in the LPA so they can ask any relevant questions.
#3 Defining Decision-Making Powers
When setting up a Business LPA, it is essential to clearly define the decision-making powers granted to your attorney. You can specify whether they have general authority to act on your behalf, or whether their powers to act will be limited to certain areas of your business. This ensures that your wishes are followed and that your attorney does not overstep their boundaries.
#4 Regular Review and Updating
Business circumstances change over time, so it is important to review and update your Business LPA as necessary. This includes considering changes in your business structure, key personnel, or any specific instructions you may want to provide. Regularly reviewing and updating your Business LPA ensures that it remains relevant and effective.
#5 Seeking Professional Advice
Setting up a Business LPA is a complex legal process, and it is advisable to seek professional advice from a solicitor experienced in this area. They can guide you through the process, ensure all legal requirements are met, and help you make informed decisions regarding your Business LPA.
#6 Communication with Stakeholders
Once you have established a Business LPA, it is crucial to communicate its existence to relevant stakeholders. This may include key employees, business partners, and financial institutions. By ensuring that everyone is aware of the arrangements you have put in place, you can avoid potential confusion or disputes in the future.
In conclusion, a Business LPA is a vital tool for every business owner to safeguard their interests. By considering the key factors outlined in this blog, you can ensure that your business is protected and that your wishes are respected in the event of incapacity.
For professional advice in order to set up or review your Business LPA arrangements, please get in touch.