Lasting Power Of Attorney For Business
What would happen to your business if you lost the ability to deal with your own business affairs and make decisions?
What if you have a business bank account in your name as a sole trader or joint bank accounts with other business owners which require the signatures of all the named account holders?
How would your business finances be managed on a daily basis in the event of an accident or illness?
A number of problems could arise such as the impact on your customers being unable to access your products or staff or creditors not being paid.
Is it now more important than ever to have a commercial or Business Lasting Power of Attorney in place
Very few businesses consider the consequences of what could happen to their business, should, they or fellow Directors lose mental capacity through accident or illness.
Have you a plan in place if a director loses capacity? Who is going deal with the banks, pay wages, sign major contracts? All these things could have a detrimental impact on a business if a Director or sole trader no longer has mental capacity.
New legislation has recently been put in place, meaning that a Director of a company can no longer be removed if they have been diagnosed with mental incapacity, anything such as dementia or Alzheimer’s.
What this means is, if you have a Director of a company that has been diagnosed as having mental incapacity, they can carry on their normal business duties, even though their illness can be affecting their judgment with the increased risk that they may seriously be damaging their business.
Who Should Have A Business lasting power of attorney?
As a Director of a company you are required to act within the best interests of the company, this also means that you also have to make provisions and have things in place to cover for any known risks. This also means that should you as a Director of a company are not able to continue to make decisions or carry out your duties as a Director through incapacity, you must ensure that you have adequate measures in place to cover should there ever be a time that someone needs to be called upon to act in your role.
Every Company Director or Partner should consider having a Business Lasting Power of Attorney in place.
If you are a sole trader, this is even more vitally important, as if you do not have a Business Lasting Power of Attorney, it may mean that a Court Order needs to be applied for to enable someone to deal with your business assets and wind up or sell your business as you have lost the capacity to do so yourself.