Whilst the importance of putting in place a Lasting Power of Attorney (LPA) to cover one’s personal property and finances in the event of incapacity is widely recognised, less well known is the fact that you can also put in place an LPA to specifically deal with your business interests. This LPA is known as a Business LPA and can be used to protect the interests of business owners and the organisations they manage.
A Business LPA allows you to consider who would be best placed to step into your shoes and make decisions for your business. An LPA for one’s personal finances will usually appoint a spouse or civil partner, children or some other trusted friend or family member. However, would those individuals have the qualifications or experience to enable the continued successful operation of the business? A Business LPA would enable you to choose the right individuals to fulfil this role and would allow for the continued smooth running of the business.
Different considerations will arise depending on whether your business is run as a sole trade, partnership or company. If you operate as a partnership, the partnership agreement may have specific provision for what happens on the incapacity of a partner. Similarly, a shareholders agreement or the company’s articles may also cover off this eventuality. However, if you operate as a sole trader or you are the sole director of your company, the business bank account may be inaccessible if you were to become incapacitated with detrimental results for the business.
RRL Wills advises clients on LPAs for both Property & Financial Affairs and Health & Welfare and has broad experience in assisting business owners plan for unforeseen eventualities.