Most of us are familiar with the benefit of lasting powers of attorney (LPA) in our personal life, but – if you run a business – have you considered the importance of taking out an LPA for your organisation?
Just as an individual’s health and welfare, or property and financial affairs LPA allows you to appoint attorneys to manage your affairs should you become incapacitated, a business lasting power of attorney offers that same protection to your business.
What is an LPA for business?
A business lasting power of attorney enables a business owner to appoint one or more individuals to make decisions in the best interests of the organisation, should he or she become mentally incapacitated (or unavailable).
With no business LPA, a business is at risk. Bank accounts may be frozen, paying creditors or suppliers may be impossible, and staff may not be paid. Can day-to-day actions go ahead if the only signatory on all the relevant accounts and documentation is the business owner?
A business LPA is an essential part of any crisis planning for a company or organisation, in the same way that a continuity plan ensures a business keeps operating in the event of natural disaster, such as fire or flood.
Five reasons to draw up a business LPA
1. If the head of the company becomes mentally incapacitated, or seriously ill, or unable to perform his or her functions, without an LPA it is a difficult and long-winded process to remove him or her from the helm. An application would need to be made to the Court of Protection to have a financial Deputy appointed, but this could take several months, during which time the business is vulnerable.
2. With no-one in charge, insurances may become invalidated, contracts void, and bank accounts frozen, with implications for paying staff, suppliers, and creditors. You may not be aware, but a bank account can be frozen even if there are other signatories.
3. With regulated organisations – such as solicitors’ firms – the professional bodies may act, and potentially licences to trade could be removed.
4. If you have a family history of dementia, then drawing up a business LPA makes sense, because you may be more at risk than most.
5. Other companies may no longer wish to trade with a business which is rudderless.
How to create a business LPA
Look first at what sort of business you run and who would be best placed to become your attorney or attorneys. You will want to choose people you trust and who understand how the business works. So you might, for example, want to appoint a family member and a business colleague, who can work together.
At Optimum Professional Services, we create business LPAs. We first discuss with the business owner what their wishes are and who would make the most suitable attorneys.
Once we have all the information we need, we will draw up the business LPA. If you wish, we can also create your personal LPAs – health and welfare, and property and financial affairs – to accompany it.
The next step is for the document to be signed and witnessed by yourself and by your named attorneys. We will then register it with the Office of the Public Guardian.
The process is simple and straightforward, and provides you with peace of mind that your business will continue to run smoothly in the event that you are no longer able to take charge. To talk to Optimum about a business lasting power of attorney email email@example.com or call 01793 538 198, or for more information visit https://www.optps.co.uk/.Tags: Business, Buying, Lasting Power of Attorney, LPA, Organisation, Premises, property, Selling, Survey, surveyor
This post was written by James Powell