Protecting your business: Do you need a Lasting Power of Attorney?

A Lasting Power of Attorney (“LPA”) is a legal document that allows you to appoint a person ("attorney") to make decisions on your behalf. These can be decisions relating to your health and welfare or your property and finances. 

As a business owner, it is important to consider what will happen if you became unable to make decisions regarding your business interests. This situation could arise as a result of illness, incapacity or even if you go away on holiday. Whatever the circumstance, your business will need to keep running, staff will need to be paid, bills will continue to accumulate and decisions will need to be made. Having an LPA means that you can appoint an attorney to make such decisions if you are, for any reason, unable to do so. 

Ensuring that you have a valid LPA should be considered as part of your business risk management planning. Not having one in place may result in adverse financial consequences for both your business and your family, particularly if your family is reliant on your income from the business. Whether you are a sole trader, partner, member or shareholder, having an LPA in place can offer you some reassurance that your business interests are protected. However, if you are a shareholder, you must give careful consideration to your company’s articles of association to ensure that there is the ability to appoint a new director to run the business in your absence. If not, it may be that the articles of association need to be amended to allow such appointment. 

When preparing an LPA, it is vital that you appoint appropriate attorneys. Think about whom you trust and who understands your type of business. Your attorney(s) may need to step into your shoes at short notice and so you need to be happy that they know what they are doing. 

Careful consideration will need to be given as to who should be appointed as your attorney(s). For some, the same people will be central to both your personal and your business interests and therefore you may need only one property and financial affairs LPA to cover both areas. However, for others, there may be a case for appointing different persons to deal with your personal and with your business interests. 

If you would like any further information regarding LPAs, please email wealth@wansbroughs.com or get in touch with your usual contact at Wansbroughs.

Last updated 28/11/2019