August 3, 2023
A lasting power of attorney document allows a specific individual, called an attorney, to make chosen decisions on your behalf.
Why would I need an LPA for my business?
You may think that there are certain individuals who would naturally step in for you should you be unable to manage your own business affairs. However, they may not have the necessary skills required to enable your business to continue thriving in your absence and they may not have the right to make certain decisions, such as signing off a cheque. It is important to consider what would happen should certain circumstances arise, such as you losing capacity or if you were abroad for an extended period of time for example.
It is important to note how your business operates on a daily basis and make provisions for this so that your business can continue if you are unable to make decisions.
Things to consider before making a business lasting power of attorney
- What type of business do you own?
a. Sole Trader
1. If you were incapacitated your business is unlikely to continue without you. Therefore, if you appoint an attorney under a business LPA you can reduce the chance of this happening.
b. Partnership
1. Does the partnership agreement provide for a circumstance in which a partner becomes incapacitated? If you feel this situation is adequately covered then you may not feel a business LPA is necessary. It is important to seek legal advice if you are creating a business LPA so you can be certain that the LPA does not contradict provisions made in the partnership agreement.
c. Limited Company- You must check your articles of association. However, they must not be discriminatory, for example, terminate an incapacitated Director on the basis of mental health. Therefore, in the interests of your business, and all of its employees, it may be necessary to have a business LPA so that the attorney can aid you in decision making.
- You must check your articles of association. However, they must not be discriminatory, for example, terminate an incapacitated Director on the basis of mental health. Therefore, in the interests of your business, and all of its employees, it may be necessary to have a business LPA so that the attorney can aid you in decision making.
- Is your attorney suitable?
A solicitor would help you to establish this, but in essence, they must have the necessary skills required to run your business. You should be certain that they would act in accordance with decisions you would make rather than decisions they think are best for the business. Therefore, it may not be appropriate for another Director to act as your attorney in certain situations.
If you wish to discuss making a business lasting power of attorney, please contact our Solihull office on 0121 705 7571 or email us at enquiries@wallacerobinson.co.uk.
Sophia Kenna
Trainee Solicitor – Wills and Probate Department
This article is for general information purposes only. It does not constitute technical, financial, legal advice or any other type of professional advice and is no substitute for specific advice based on your individual circumstances. We do not accept responsibility or liability for any actions taken based on the information in this article. For more information, please click here.
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