Safeguarding the future of your business with a Lasting Power of Attorney
It is worrying to think about what would happen to your personal affairs and finances if you were to lose mental capacity. But what about the stability of your business and the financial future of it and any employees?
A Lasting Power of Attorney (LPA) is a legal document made by an individual which nominates a trusted person or persons as their attorney(s) to look after their property and finances or make decisions about their health and welfare when they become unable to make such decisions themselves. The document isn’t just appropriate in a domestic sense – paying bills on someone’s behalf, buying or selling their home, organising their care or welfare needs... There are two types of LPA, one for your Property and Financial affairs and one for your Health and Welfare. A Property and Finance LPA is an incredibly important document to have for protecting your business. As soon as the document is registered with the Office of the Public Guardian it can be used. It can be used prior to the onset of mental incapacity and used purely for convenience purposes if the document itself is not restricted.
Appointing an attorney for your business would allow them to do general business tasks that you could do yourself; allowing access to bank accounts, negotiating contracts, renewing leases or buying or selling business property, purchasing insurance, paying salaries, ordering supplies etc. Giving someone the ability to do these types of things for you would ensure business continuity if you became ill, injured or otherwise incapacitated. It would also allow if you chose to take a step back before retiring, if you chose to travel or focus your attention towards other projects or hobbies.
Mental incapacity is wrongly associated with old age and medical conditions such as Alzheimer’s or dementia. Incapacity could be temporary following illness, physical injury, a stroke or accident; it could even be brought on whilst taking certain medication.
So who would make a suitable attorney? You would need to appoint someone familiar with the business itself, someone you know well and trust implicitly, someone with good market knowledge and business sense. A professional legal attorney would be an ideal candidate. Who better than someone with a sound understanding of your Company’s Articles? Someone who is familiar with your partnership, shareholder or employment agreements, knowledge of your tax affairs or ongoing investments – previous commercial property dealings and any past or potential mergers or acquisitions?
If you are able to, we recommend you appoint more than one attorney. A professional legal attorney with a strong link to the business and its operations, alongside perhaps a long-term employee and/or a family member with ties to the business and yourself. You can specify how you would like your attorneys to act whether it is jointly or independently or jointly for certain decisions but independently for other things. You can note down preferences or instructions in the document for your attorneys to follow – for example if you want certain investments to be monitored or continued, if you only wish for property to be sold in certain circumstances, if you do not want certain things to be carried out without being approved by your Solicitor or Financial Advisor – the list is endless. You will continue to make business decisions yourself until you are mentally unable to, the Business Lasting Power of Attorney doesn’t in anyway affect your control or decision-making and your attorneys have to act in the best interests of you and your business.
Make sure to check or amend your Company’s Articles to ensure you are able to delegate such tasks to your attorneys before instructing the drafting of your Commercial Lasting Power of Attorney/s.
For more information on our professional attorney services or Business Lasting Power of Attorneys themselves, please get in touch.