Imagine a scenario where you, the driving force behind your business, are unexpectedly incapacitated due to illness or accident. Important decisions need to be made, but you’re unable to make them yourself. This can lead to confusion, delays, and even threaten the very survival of your business.

A Business Lasting Power of Attorney (LPA) acts as a safety net in such situations. It’s a legal document that allows you to appoint one or more trusted individuals (attorneys) to make decisions concerning your business interests if you become unable to do so yourself.

Here’s a closer look at why a Business LPA is crucial for any business owner:

Ensures Business Continuity:

• Unforeseen Incapacity: Accidents and illnesses can strike anyone, anytime. A Business LPA ensures your business doesn’t grind to a halt during such unforeseen circumstances. Your appointed attorneys can step in and manage day-to-day operations, enter into contracts, and make critical financial decisions to keep the business afloat.

• Planned Absence: Business LPAs aren’t just for emergencies. They can also be helpful if you’re going to be unavailable for an extended period, such as a long business trip abroad. Your attorneys can handle business matters while you’re away, providing peace of mind and avoiding disruptions.

Protects Your Interests:

• Clear Decision-Making: Without an LPA, the court might need to appoint a deputy to manage your business if you lose mental capacity. This process can be lengthy and expensive, and the appointed deputy might not possess the necessary understanding of your business goals and vision. A Business LPA allows you to choose attorneys you trust and who are familiar with your business, ensuring decisions are made in your best interests and aligned with your vision.

• Minimises Disruption: A court-appointed deputy might lack the knowledge to run your business smoothly. This can lead to confusion among employees, clients, and suppliers. An LPA empowers your chosen attorneys to seamlessly step in and maintain business continuity, minimizing disruption and safeguarding your relationships.

Provides Peace of Mind:

• Future-Proofing: Knowing your business has a plan in place for unexpected situations allows you to focus on running and growing your venture with peace of mind. The certainty of an LPA eliminates the worry of your business floundering during your absence or incapacity.

• Family Security: If your business is your primary source of income, an LPA helps ensure financial stability for your family even if you’re unable to work. By keeping the business running, your attorneys can continue generating income to support your loved ones.

Who Can Benefit From a Business LPA?

A Business LPA is a valuable tool for a variety of business structures:

• Sole Traders: As a sole trader, your business is not a separate legal entity from you. An LPA is crucial to ensure someone can manage your business finances and assets if you’re incapacitated.

• Partnerships: While partnership agreements might address situations of incapacity, an LPA offers additional flexibility and ensures a smooth transition if one partner becomes incapacitated.

• Limited Companies: Directors can use a Business LPA to appoint someone to handle their voting rights and company decisions if they unable to do so themselves (dependant on the company setup)

What Can Your Attorneys Do With a Business LPA?

The specific powers granted to your attorneys are outlined in the LPA document. They can typically include:

• Managing bank accounts and financial transactions
• Entering into contracts on your behalf
• Dealing with employees, including hiring, firing, and payroll
• Selling or acquiring business assets
• Representing the business in legal matters

Getting Started With a Business LPA

Creating a Business LPA is a straightforward process:

1. Consult a Solicitor: We can guide you through the LPA creation process, ensuring it complies with legal requirements and reflects your specific needs.

2. Choose Your Attorneys: Select trustworthy individuals with a good understanding of your business and its goals. Discuss their roles and responsibilities clearly.

3. Register the LPA: Once completed, the LPA needs to be registered with the Office of the Public Guardian to become legally binding.

4. Keep it Updated: Review your LPA regularly and update it if your circumstances or business structure changes.

In conclusion, a Business LPA is an essential tool for any business owner in England. It safeguards your business interests, ensures continuity during your absence or incapacity, and provides peace of mind. By taking this proactive step, you can ensure your business thrives even when you’re unable to be at the helm.

If you would like to discuss setting up a Business LPA with one of our Consultant Solicitors click below to make an enquiry