As a business owner, it is vital for you to consider what might happen to your business if you were not able to make decisions due to:
Who would take over the running of the business on your behalf, sign contracts, pay salaries and suppliers, write cheques and make any important day-to-day decisions to keep the business going? Worryingly, many financial institutions respond to a business owner’s lack of capacity by freezing bank accounts.
You might think that your family members or your other business partners/directors can take over, but there is no automatic legal right to deal with another person’s financial affairs and this might place your business at risk.
To tackle this you should consider appointing an Attorney to act on your behalf and deal with any business matters. This would ensure business continuity in the event of you being unable to work.
To legally appoint an Attorney to act on your behalf, you would need to complete and sign a Lasting Power of Attorney (LPA), which is a legal document that allows you to give another person (your Attorney) authority to make decisions on your behalf in any issues relating to your Business. By having an LPA in place for your business interests (Business LPA) you can ensure that your business runs smoothly even when you are unavailable or incapacitated.
The first item to consider in preparing a Business LPA is a review of the type and structure of the business you own and any membership agreements and articles of association.
Next, you will need to identify who would be a suitable attorney. This should be someone you trust and who is familiar with the business.
Please note that your Business LPA will be limited to your business assets only, therefore your business attorney would have authority to deal with your business assets only. They would not be able to access and manage your personal bank accounts, property or any other personal assets.
You can of course make a second Property and Finance Lasting Power of Attorney to appoint a different attorney, normally a family member, to deal with your personal financial affairs.
We believe a Business Lasting Power of Attorney is an essential element of your business continuity plan and could play a vital part in the continuing success of the business you have worked so hard to build.
Please note that a Business LPA can be a very complex matter and professional advice should be sought before creating one.
For further advice and assistance in preparing a Business LPA tailored to you and your business, please contact Nina or another member of our Private Client team by calling 0330 0945 500, emailing firstname.lastname@example.org or complete our online Contact Form and we’ll get back to you.