A Business Lasting Power of Attorney (LPA) or a general power of attorney, is a document allowing you to appoint a person, or persons, you trust to have a legal right to act on your behalf in relation to your business affairs, whether you are a sole trader, a partner, or a company director.
This will include giving that person, your Attorney, the ability to nominate a director to replace you on the board, to protect your shareholding. In a business of any size, your Attorney will be able to ensure that your business continues to run smoothly and, in particular, to continue to pay your creditors and employees, in the event that you are mentally incapacitated or physically unable to deal with such matters due to being out of the country, for example.
A colleague or family member may not necessarily have the power or authority to make business decisions for you.
Your Attorney will be expected to make decisions on your behalf (although will not act as a director of a company him or herself) and in your best interests. You will need to think carefully about who this should be; you will need to avoid any potential conflicts of interest as well as ensure that your Attorney has sufficient knowledge and experience to take conduct of your business affairs.
Without a Business LPA in place, if something should happen to you leaving you unable to manage your business affairs, an application to the Court of Protection will be necessary, so that a Deputy is appointed for you. However, the decision about who that person will be will not be your choice and the period of time it will take to go through the process of appointing that Deputy could mean that your business is left vulnerable in the meantime.
It would be prudent, therefore, to ensure your day to day business affairs can be taken care of in the event of something unexpected. It may prove crucial in avoiding disruption at a critical time.
If this is something you think would be useful to you, or you simply want more information about Business LPAs, please contact our New Client Co-Ordinators.