Lasting Power Of Attorney For Business
If you are a business owner, you need a Business Lasting Power of Attorney.
Who Should Have A Business LPA?
As a Director of a company you are required to act within the best interests of the company. This also means that you must have a business plan in place to cover for any known risks. One such risk is your lack of capacity, whether long term or temporary. By making a business LPA you are making sure that you have appointed appropriate people, even professionals, to step in and make decisions about your business on your behalf should you lose capacity.
This will mean there is minimal disruption to your business.
Every company Director, Partner, or sole trader should have a business LPA in place. If you don’t then it may mean that an application needs to be made to the Court of Protection for a Deputy to be appointed.
This is an expensive process that takes months to complete, leaving your business exposed during this time.
The importance of a Lasting Power of Attorney for Business
It is now more important than ever to have a business LPA 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.
Should you lose capacity with no legal plan in place the impact on your customers and your business could be huge. Business bank accounts may be frozen by your bank leaving staff wages unable to be able to be paid, and contracts unfulfilled until proper arrangements can be made. It’s an unfortunate fact that it can take as little as 6 weeks for a business to fail if the person at its head loses capacity.
In 2013 the Mental Health (Discrimination) Act 2013 was introduced; under this legislation a Director of a company can no longer be removed if they have been diagnosed with a mental incapacity such as 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.
With a business LPA in place an attorney can take over the decision making once the business owner lacks capacity to make decisions themselves.
How can we help?
It’s important that we work with you to understand your business as this will affect the planning, we can put in place for you.
If you are a Partner or shareholder, then we can review your partnership agreement or articles of association to make sure that you can put a Business LPA in place.
What to consider when appointing a business Attorney
We can’t choose your Attorney’s for you, but we would urge you to consider the following guidance when choosing your Attorneys:
- If you work in a regulated industry you need to ensure that your Attorney’s are suitably qualified and regulated themselves.
- Do they have skills relevant to your industry? Or preferably an in-depth knowledge of your business itself?
- Most importantly; how well do you know and trust your Attorneys? After all, you are leaving the future of your business in their hands if you should lose capacity.