Business LPAs


An injury or unexpected loss of capacity to you can impact significantly on your business.

It could result in no-one being authorised to make payments to suppliers, pay wages, or enter into contracts. As a result, your business could be put under a huge amount of strain and, in certain circumstances, go into liquidation.

Business owners (whether a sole trader, partner or company director) should consider putting in place a lasting power of attorney to enable the business to continue to operate successfully in the event that he or she is not able to make financial decisions personally.

The idea behind the LPA is for you to appoint someone (known as your “attorney”) who you know and trust to step in, if you suffer an injury or lose capacity to make decisions, at some point in the future. As a business owner, you will want to choose someone to act on your behalf who is both familiar with the business on a day-to-day basis and is commercially astute. If you are a company director, you will also want to review your company’s articles of association to see what happens if you or another director were to lose capacity as the LPA and the articles of association need to work alongside one another.

The LPA can be tailored towards your business interest only or, alternatively, it can also cover your personal assets should you wish. This would require careful drafting.

If you were to lose capacity without having made a LPA, an application would need to be made to the Court of Protection for someone to be appointed as your deputy. This is a costly and time consuming process and someone who you would not want to act in your place may end up being appointed.

It is natural to hope that you will never need a LPA.  However, why take the chance?  For a relatively small cost, you can ensure the continued success of the business that you have worked so hard to build up.

Paul Collingwood is a solicitor in the specialist Wills & Probate team at Newcastle law firm Sintons. To speak to him about this or any other matter, contact Paul on 0191 226 3713 or paul.collingwood@sintons.co.uk

 


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