The use of the Lasting Power of Attorney (LPA) – where an ‘attorney’ is appointed to make certain decisions on your behalf should you reach the point where you are unable to make them yourself – has increased significantly in recent years.
However, it would be a mistake to view LPAs as purely a tool for individual use. A business or commercial LPA can prove just as useful if you happen to own your own business.
Illness Or Injury
What would happen if you were injured or fell seriously ill? Who would take over the running of the company? Who would be in charge of those strategic decisions on which the future of the business will depend?
While there may be some form of informal understanding among you and your senior team of who would take on that responsibility, that isn’t actually enough. Without some form of legal structure in place, there may be issues with them accessing the business’s bank accounts, arranging contracts with suppliers, even paying the salaries of the existing staff. It may not take long for the company to end up in serious difficulties.
Writing a business LPA is an excellent way to tackle this, ensuring that an appointed attorney is in place to step in and maintain continuity should you no longer be able to fill that role.
Choosing a Suitable Attorney
Picking a suitable attorney for a business LPA is not altogether different to selecting one for a personal LPA. You need to find someone who you trust, who is reliable and who has a similar outlook and attitude towards the business as you. It’s vital that you talk this responsibility through with them in advance though, so they are well aware of what will be expected of them should you fall ill or be involved in an accident.
As with a personal LPA, you can appoint more than one attorney, and specify that they act together in certain areas but separately in others.
Jim Emsley, Managing Director from ELM Legal Services said: “Successful business owners pride themselves on being prepared for all situations, and sadly ill health is an important one to consider. Without making it clear legally that one of your team can step in and make important business decisions on your behalf, if you are no longer able to, it can put the very future of the firm in danger. As a result, having a business LPA in place is vital.”