Why should I consider making a Business Lasting Power of Attorney (“LPA”)?
Continuity planning is a normal part of business life, and the COVID-19 pandemic has made it even clearer that a key part of the planning process is to set out what should happen if you become unable to make decisions yourself.
For example, have you considered what would happen if:
• You are suddenly taken ill whilst abroad on holiday or for business?
• You have a serious accident?
• You develop an incapacitating medical condition?
A business can rapidly stop trading if there’s no one with authority to deal with the practicalities of banking, signing-off contracts, paying taxes or doing the hundred and one things a business owner has to do in order to keep your business functioning.
You can’t assume that a family member or a business colleague will just be able to take over – often, they can’t. A lack of continuity planning can affect your family, employees, business partners, suppliers and many others, and the reputation of your business can quickly suffer.
The answer is to consider making an LPA, which formally gives someone (known as an “attorney”) the ability to make decisions on your behalf and for you to make your business partner or key stakeholders aware of these plans.
Can you make an LPA covering your personal and business affairs?
In principle, you can set up just one LPA appointing attorneys to manage your personal assets and your business assets. However, you may feel that the right person to make decisions about one, is not the right person to make decisions about the other.
In that situation, you should consider making two LPAs, one of which delegates responsibility to an attorney in relation to your business affairs, and the other to a different person as attorney for your personal affairs.
What happens if I don’t make a business LPA?
If you become unable to make business decisions in the future, and haven’t made an LPA, it is likely that an application will need to be made to the Court of Protection for a deputy (effectively, a court-appointed attorney) to be appointed to act on your behalf.
However, the process is expensive, and, more importantly, it is unlikely to take less than 6 months to complete, leaving your business vulnerable and at risk. A business LPA ensures that things can continue to run smoothly until (hopefully) your return.
Be certain, click here to contact a member of our friendly and highly experienced Private Client team today and have peace of mind knowing that whatever the future may hold, you have a plan in place.