Why write a Business Lasting Power of Attorney

by Dec 27, 2017Blog

Business Lasting Power of Attorney: Possibly the most important business document you can have!

Whether you are a business owner, director, partner or sole trader, protecting the future of your business with a Lasting Power of Attorney makes excellent business sense.

As a business owner it is important to consider what might happen to the business if you should be incapacitated by illness, injury or lack mental capacity.

Who would take over the running of the business and its financial affairs in your absence?

Whilst there may be ‘an understanding’ amongst your colleagues of what would happen should illness or injury take you away from the business, in the eyes of the law this isn’t sufficient and you cannot guarantee what would happen

Unless you have legally appointed an Attorney, key business operations may not be possible, for example, access to bank accounts may be denied, suppliers not getting paid, contracts could be compromised or lost, insurance premiums won’t be renewed, and salaries could go unpaid. This disruption to your business could be significant, and the impact would quickly be felt.

A business or commercial Lasting Power of Attorney (LPA) is an important document to prevent this.

You can use an LPA to appoint your chosen Attorneys to deal with business matters and ensure the continuity of your business in the event you are unable to work. Powers of Attorney are already widely used by businesses to manage a range of commercial situations. Business Lasting Powers of Attorney should be seen as an extension of managing business interests, as part of the business crisis management practice and reducing business risk.

Business LPAs are different to personal LPAs (that deal with your personal finances and affairs) in that they are restricted to only deal with your business, therefore, providing a vital element of your business continuity planning.

Preparing Your Business Lasting Power of Attorney

The first step in preparing a business LPA is to review your company structure, the company’s articles of associations (if any), and partnership or shareholder agreements (if any).

Then you will need to identify a suitable Attorney. This should be someone you trust and who you know is capable of doing the job how you would want it done, is familiar with the business and has good knowledge of your business market.

It is possible to appoint more than one Attorney, and to specify Attorneys to act jointly in some matters. For example, you could choose to appoint a trusted business associate who knows the business well to negotiate contracts, whilst also appointing a family member for the control and accessing of bank accounts. The structure is your choice as befits your needs and those of the business.

In addition to your Attorneys, you will also need a ‘certificate provider’ which is someone who:

  • Signs to confirm that they’ve discussed the document with you;
  • That you understand what you are doing; and
  • That nobody is forcing you to do it.

There are specific rules as to who this ‘certificate provider’ can be and we are pleased to say that Trusted Law can provide you with this service.

Once your LPA is in place

After your LPA has been signed by all parties, it will be sent to the Office of the Public Guardian for registration.  This can take between 8-12 weeks, but once it is registered it can be used.

The LPA will allow your Attorney to make business decisions on your behalf, including accessing business bank accounts, paying suppliers/employees, dealing with business property, organising insurance and repairs, dealing with business tax affairs and making those vital decisions in your absence to ensure your business survives.

If the worst should happen

If the worst happens and you are unable to deal with your business, your family members (not your business partners as there is a strict order to follow) will have to apply to the Court of Protection for permission to deal with your affairs.  This process can take anywhere between 3-12 months and fees are much higher.

Your business will benefit greatly with an LPA in place as it is there to use from day 1 of that unpredictable event.  This makes good business sense and is right for the majority of companies irrespective of size. It should be the cornerstone of an effective business continuity plan.

Still unsure about your Business Lasting Power of Attorney?

If you are putting off establishing your business LPA because you are unsure of how to go about it or can’t decide on the fine detail, then there is no need to worry.  To provide you with peace of mind, you can discuss your situation and concerns with Natalie from Trusted Law Ltd

It is a process that can be dealt with relatively quickly, and it can save you hours of stress trying to figure out what is needed.

To make your appointment, or for an informal chat, please feel free to contact me via email: info@trustedlaw.co.uk or phone: 01953 711 950 / 07972 212 355.

Please note that this information is provided as a guide only and in accordance with the current laws as at the date of publishing. 

 About me and Trusted Law Ltd

Natalie ChapmanMy name is Natalie Chapman – company director of Trusted Law, a wife to Darren and a Mum to our twins.  To read more about how Trusted Law Ltd was establish please click here.

I have personally visited each of my clients and enjoyed my time getting to know each of them, listening to their tales and stories and making sure I fully understand their needs.  If you would like to discover what my clients say about us, please feel free to read my client Testimonials.