A Lasting Power of Attorney for your business
When determining a business continuity plan and crisis management strategy, business owners should ensure it covers what may happen if they are unable to continue making important business decisions.
This may be due to ill health, an accident, or long-term illness. It may also be due to being abroad which is particularly relevant at present, given the changing restrictions due to the pandemic, which may leave you unexpectedly unavailable to deal with important business matters
If you lose capacity to make essential business decisions it poses the risk that certain business transactions will no longer be able to be carried out.
This may include business accounts being frozen, having no authority to approve wage payments or to sign legal agreements.
Without a Business Lasting Power of Attorney (BLPA) in place you may struggle to deal with these matters.
This may even cause your business to cease trading or be in breach of certain contracts or legislation.
Without a BLPA, your business may breach certain contracts or legislation
A Lasting Power of Attorney (LPA) enables people to choose a trusted person to make decisions on their behalf if they are no longer able to make decisions for themselves. A BLPA is an LPA restricted to decisions regarding your business. Therefore, it may run concurrently alongside personal LPAs.
It is likely to mean you may need several Lasting Powers of Attorney running concurrently. You may have one appointed to look after your personal finances, one for your health and one specifically to manage your business interests.
It is advisable to consider whether an attorney appointed under an existing financial Lasting Power of Attorney is best suited to manage your business affairs as well if you lost capacity.
Would your family members have the requisite knowledge and understanding of your business to ensure it continues to operate effectively whilst ensuring all legal obligations are dealt with?
An appointed BLPA attorney should be someone you trust and is familiar with the business.
Once registered, your appointed attorney can make financial decisions on your behalf, including buying and selling property, accessing bank accounts and opening and closing bank accounts.
If you don’t have a BLPA in place and you do lose capacity, an application will need to be made to the Court of Protection for the appointment of a deputy. This deputy will act on your behalf under the authority of the court.
This is an expensive route and can take minimum six months to put in place and there are no guarantees of who the court will appoint.