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A Lasting Power of Attorney (LPA) is a legal document that allows you to appoint one or more people (your Attorneys) to help you make decisions or to make decisions on your behalf.
There are two types of LPA: one to deal with your Property and Financial Affairs and another that deals with your Health and Welfare. A Health and Welfare LPA can only be used by your Attorneys when you have lost mental capacity.
Although many people recognise the need to prepare a Property and Financial Affairs LPA to appoint an Attorney to deal with their personal finances, directors, partners and sole traders often overlook the need to prepare a LPA to deal with their business affairs, as they have not given consideration to the detrimental impact on their business should they become unable to act, due to loss of capacity, for example.
Although on loss of capacity an application can be made to the Court of Protection to appoint a Deputy to act on your behalf, this is time consuming and expensive. This delay may prove catastrophic.
If you are unable to act through illness or injury, who would have access to your business accounts? Who would pay your employees’ salaries? Who would settle outstanding debts with creditors? Who would sign contracts on your business’ behalf?
Whilst it is necessary to review any Articles of Association, Partnership Agreement or Shareholder Agreement and to carefully think about the suitability of your Attorneys, the benefits of preparing a business LPA are undoubtedly worth your time and effort. A business LPA could potentially safeguard your business and could be the difference between its continuation and its collapse.
If you would like more information on LPAs, then please contact our Private Client Department on 01743 285888.
Need advice? Email us firstname.lastname@example.org