If you run a business, it’s important to organise a Lasting Power of Attorney (LPA) in case you ever lose the mental capacity to make your own decisions.
This arrangement ensures that your senior role and business is managed appropriately and according to your wishes, should you lose the capability to do so yourself.
What is Lasting Power of Attorney for Business?
Many of us will know the importance of having a Lasting Power of Attorney (LPA) to manage our personal affairs, should we lose mental capacity. However, this is not the only type of LPA you might need. If you are responsible for a business, you should have in place a Business LPA, should the circumstances arise.
You are likely to need a Business LPA if you are:
- a business owner
- a sole trader
- a sole director of a company
- a member of a board of directors.
The benefit of having a Lasting Power of Attorney for Business
Whether you are a business owner or director, there are things that require your consent, and perhaps your signature, to go ahead. This may, for example, include paying bills or authorising the payment of salaries. Being unable to carry on with these could mean the end of the business.
Having a Business LPA will allow the business to continue smoothly in the short term, while the Attorney can arrange a satisfactory exit from the business that will benefit everyone.
Who can I choose to be my Business Attorney?
A Business LPA is crucial to get right, and there are many points to remember and pitfalls to avoid when arranging. For example, you should:
- Appoint a person who is familiar with business matters and has the skills and knowledge to make appropriate decisions.
- Avoid appointing a member of your family, even if they are involved in the business.
- Avoid appointing the same person as a Business LPA and as a personal Finance and Property LPA.
To find out more about LPA for business and what you need to know before setting one up, read our article all about it, here.