What is an LPA?
A Lasting Power of Attorney (LPA) is the legal document which enables you to nominate one or more trusted people (attorney/s) to make important decisions on your behalf should you become mentally or physically incapable of doing so. There are two types of Lasting Power of Attorney, one for Property and Financial Affairs, and one for Health and Welfare. For more information on Lasting Powers of Attorney generally, please click here.
LPAs for business
A business LPA is a specific type of Property and Finance LPA. An LPA can be particularly important for a business owner, because of the responsibilities they have in running their business. A business LPA can allow an attorney to manage the business on your behalf should it be necessary, for example:
- If you have been in an accident
- If you are medically incapacitated
- If you are abroad for business or on holiday
You shouldn’t assume that a family member or business colleague will have legal authority to make decisions on your behalf, unless a business LPA is in place. The business LPA will give a trusted person (attorney) the ability to make financial decisions to continue with the running of the business, such as paying salaries and invoices, and signing cheques.
Should I make a business LPA?
Whether or not a business LPA is suitable depends on the type of business you own:
- Sole trader – if you are a sole trader, your business is likely to not be a separate legal entity to you and so a business LPA can ensure that your business is able to continue should you be unable to run your business.
- Partnership – whether or not a business LPA is necessary may depend on whether a partnership agreement in place and if so its terms. If you do have a partnership agreement then there may be provision in place should one of the partners become incapacitated, but if you are unsure then you may wish to seek legal advice.
- Company director – whether or not a director can appoint an attorney will depend on the terms of the Memorandum and Articles of Association of the company. There is also likely to be provision in the articles of association which requires the termination of a director’s appointment should a director lose capacity.
Having a business LPA in place will not affect the business owner’s right to continue managing the business whilst they are willing and able to do so.
What if I do not have a business LPA in place?
If you do not have a business LPA in place and have become unable to make decisions on behalf of the business, it is likely that an application will have to be made to the Court of Protection. Applications to the Court of Protection are expensive and can take many, many months to be dealt with. There is no guarantee that they will choose the person you would have wished to take care of the business. All of these factors can put your business at risk.
Should your business structure require it, a business LPA can provide the protection and continuity to keep your business running if you are unable to act for a period of time, or indefinitely.
- Preparing and Registering a Property and Financial Affairs Lasting Powers of Attorney
- Preparing and Registering a Health and Welfare Lasting Powers of Attorney
- Help for dependents of people without Lasting Powers of Attorney
- General (Ordinary) Powers of Attorney
- Advice re existing Enduring Powers of Attorney and Registration of existing Enduring Powers of Attorney
- Obtaining mental capacity reports where appropriate
Providing advice where it is not possible to set up a Lasting Power of Attorney due to lack of capacity
- Advice re duties and powers of Attorneys
- Advice re disputes relating to Lasting Powers of Attorney
- Applications to the Court of Protection including Deputyship applications
“The (Corporate and Commercial) team did Verisona Law proud. I really appreciate all your assistance throughout the transaction.”
Director of a Groundworks and civil engineering business, June 2018
“I would just like to say a very big thank you to you for all of your amazing hard work and patience during the course of the sale. Myself and the family very much appreciate it.”
Exiting shareholder of an IT company, July 2018
“Thank you for all your work in dealing with the acquisition, your advice has been really helpful.”
Seller of a healthcare business, January 2019
“If it had not been for the EPA I would have had real problems even discussing my mother’s affairs with banks, investment companies, government departments and care providers, much less paying her bills from her account.
“Being able to supply copies of the EPA to the various parties meant they would speak to me and act on my instructions. Without it I would have had to pursue a long, complicated and expensive legal process – at a very difficult time personally.
“I would absolutely recommend planning ahead and making an LPA. It could make a huge difference to your loved ones.”