What is a Business LPA and why should you have one?
Emma Longstaff | Associate Solicitor
A Lasting Power of Attorney allows you to appoint people that you trust to deal with your property and financial affairs if you are unable to do so. This may be by loss of mental capacity or physically being incapable of doing something.
Have you ever imagined how damaging it could be to your business if you were to lose mental capacity or become unable to physically sign mandates or contracts?
A Business Lasting Power of Attorney, much like the property and affairs Lasting Power of Attorney, allows you to appoint people that you trust to deal with your business affairs if you were unable to do so.
But why should I create a separate Lasting Power of Attorney just for my Business?
Your Attorney for your personal financial affairs and property matters may be able to deal with those quite easily and have the competency to do so, but do they have the skills and business acumen to deal with your Business affairs? Think about the types of matters they would need to deal with, such as contractual obligations.
You should think carefully about who you appoint as your Attorney(s) for the Business Lasting Power of Attorney and ensure that they have the correct skills and abilities to be able to manage your affairs if required. You should also check if there are any regulatory requirements for the appointment. In certain areas there must be a like for like appointment, such as Solicitors and Accountants, for example.
Your documentation such as the Partnership Agreement and Company Articles should all be reviewed when considering making the Business Lasting Power of Attorney. At Josiah Hincks Solicitors we have a commercial department who can review these documents for you and provide you with a full legal service.
But, why are they so important?
The Lasting Power of Attorney would allow you to continue running your business, but be sure that if anything was to happen that you have provided for this and the Attorney can step in and act on your behalf.
If you were to lose capacity without a Business Lasting Power of Attorney in place, there could be issues with banking and cashflow, as accounts can be frozen if the bank finds out one of the signatories have lost capacity. There could be contractual breaches, and business confidence could be lost.
There are many aspects that would need to be considered when making a Business Lasting Power of Attorney. If you would like to discuss the same then please contact a member of our team.
