Unlocking the Power: Business Lasting Powers of Attorney - Your Questions Answered

How would your business cope if you were no longer able to take the helm?  Have you considered what would happen if you were unable to manage the day to day running of your business?  Below, we consider what is a Business Lasting Power of Attorney and what are the benefits of having one in place.

Q: What exactly is a Business Lasting Power of Attorney (LPA)?

A: A Business Lasting Power of Attorney (LPA) is a legal document that grants someone the authority to make decisions about your business affairs if you become unable to do so. It’s a proactive measure to ensure continuity and smooth operation, especially during challenging times.  It can be used either if you are physically unable to manage your business or if you lose the mental capacity to manage your business.

Q: Why would I need a Business LPA?

A: Imagine unexpected circumstances, such as an accident or illness, that renders you unable to manage your business, even on a temporary basis. A Business LPA ensures that a trusted individual (the attorney) can step in to make decisions on your behalf, avoiding disruptions and safeguarding your business interests.

Q: How is it different from a Lasting Power of Attorney (LPA) for personal matters?

A: While a standard LPA covers personal matters, a Business LPA specifically addresses decisions related to your business. It empowers your chosen attorney to handle financial transactions, contracts, and other business affairs. 

Q: Who should I appoint as my business attorney?

A: Your business attorney should be someone you trust implicitly, possessing a good understanding of your business operations. This could be a business partner, a key employee, or a professional advisor familiar with your business.

Q: What powers can I grant through a Business LPA?

A: The powers granted can cover a range of business activities, including managing bank accounts, entering contracts, dealing with suppliers, and making strategic decisions. The specific powers can be tailored to suit your business needs.

Q: Can I limit the powers granted in a Business LPA?

A: Absolutely. You have the flexibility to define the scope of powers granted in the document. If there are specific areas you want to exclude or limit, these can be clearly outlined in the Business LPA.

Q: When does a Business LPA come into effect?

A: A Business LPA is only effective once it has been registered with the Office of the Public Guardian. It’s a legal requirement and ensures transparency and oversight in the use of the powers granted.  Once it is registered, it can be used immediately if you need it, or you can choose to only use it in the event you lose mental capacity.

Q: Can I have both a personal LPA and a Business LPA?

A: Yes, you can have both. In fact, it’s often advisable. While a personal LPA covers decisions regarding your health and personal affairs, a Business LPA focuses specifically on your business interests. Together, they provide comprehensive coverage.  You can also choose different attorney’s to appoint to assist with your business than those you wish to help with personal matters.

Q: How do I set up a Business LPA?

A: Consult with a legal professional experienced in Lasting Powers of Attorney. They can guide you through the process, help draft the document according to your specifications, and ensure it complies with legal requirements.

Q: Is a Business LPA a one-time document, or can it be updated?

A: All Lasting Powers of Attorney are Deeds and as such the document cannot be altered or amended once registered.  It is however advisable to review your Business LPA regularly, especially if there are changes in your business structure or key personnel and if necessary, you can put a new LPA in place. This ensures that it accurately reflects your current intentions and circumstances. 

It is often something overlooked in managing your business but in navigating the complexities of business ownership, a Business LPA is a powerful tool to secure the future of your enterprise. As with any legal document, seeking professional advice ensures that your Business LPA aligns with your unique business needs and provides the protection and continuity you desire.

For expert advice on Lasting Powers of Attorney and to discuss if a Business LPA might be useful for you, contact Maddie here by phone: 07743586283 or e-mail: madeline@ne-familylaw.co.uk.