Business Lasting Power of Attorney
What is a Business Lasting Power of Attorney?
A business lasting power of attorney allows you to appoint somebody that you trust and someone who either has been involved in your business or understands your business, to take over the day to day management, administration and decision making, as soon as they are needed to do so. You can be as generic or specific as you want to be in your power of attorney but the key purpose of it is to ensure that your business continues without disruption and key decisions are made without requiring your input.
Why might you need a Business Lasting Power of Attorney?
A lasting power of attorney, in the business sense, is usually in place in the event of a medical conditions such as dementia or incapacity in other ways. Something simple can stop you from running your business such as having a broken leg. You may also be delayed abroad and unable to provide instructions or run your business from abroad. You could have an accident overseas which leaves you in no condition to make business decisions. Having a business lasting power of attorney allows you to plan for business continuity if any of the aforementioned should happen.
What type of business needs it?
If you are a partnership, then it is usual for other partners to take over your role but this is not always the case. Some partnership agreements include clauses for a partner becoming incapacitated but if there is an absence of accurate drafting, then a business lasting power of attorney would be required.
If you have a limited liability business, then the first port of call would be for you to look at your articles of association as these often deal with the ways in which a director’s appointment can be terminated due to loss of capacity. This is usually done in order that the Company’s interests are protected. If you are a sole trader, appointing an attorney is simpler than you may well have thought because this is the easiest way to make decisions as to who can take over your company in the event that you are unable to make decisions.
Who should I choose?
Ideally, the person who you appoint in your lasting power of attorney should be someone who you trust. Failing that, it should be someone who knows your business well enough to run it in the manner that you would run it. You can of course appoint more than one attorney and they can work alongside each other. Some Clients may find it useful to appoint a member of their family to work alongside another director because this would ensure that any decisions that are made by the co-director, can be questioned by a second person. We can draft your business lasting power of attorney as flexibly as it suits your circumstances and this can specify how decisions are to be made, what majority is needed, what types of decisions can be made, what can be changed, what cannot be changed, division of profits and so on.
What if I don’t have one?
If you do not have a business lasting power of attorney and you do lose capacity, then the people who look after you will need to apply to the Court of Protection. This can take several months to arrange as detailed information is required about you and your business. Unfortunately, your business may suffer whilst this takes place and you or your family will not have a say in how the business is being run during that interim period. It can also be expensive to make applications to the Court of Protection, in comparison to making a lasting power of attorney whilst you do have capacity to do so.
We are happy to take your instructions and discuss which aspects of your business you wish to delegate to someone else in the event of you becoming incapacitated. We will draft your power of attorney in accordance with your needs and we will execute the power of attorney as well. We can also arrange for your lasting power of attorney to be registered with the Office of the Public Guardian if you wish to do so.
Please do not hesitate to contact us for a consultation regarding your business lasting power of attorney but we would bring to your attention that we do not offer a free consultation with regards to any type of power of attorneys.