- December 2, 2016
- Posted by: Josiah Hincks Solicitors
- Category: Our News
Lasting Power of Attorney for business owners
There is a common misconception that Lasting Powers of Attorney (LPA) can only be used for personal matters – this is not true. In this blog, our Wills and Probate Solicitor in Market Harborough, Sandy Kaur, explains why it is important for business owners to get a Lasting Power of Attorney sorted.
Are you a company director, partner or sole trader? If so, have you considered what would happen if you became incapable of managing your own business due to a mental or physical illness or disability?
Do you have a plan in place to ensure that day to day running of your business runs smoothly in your absence? If not, then you should give it some serious thought.
If you have your own business, then it is most certainly fair to say that you have invested a lot of time, money and effort into your business and it is vital that you protect your interests.
You may be unable to make decisions if you were out of the country, suffered a serious accident or were unwell as a result of a mental or physical illness.
Unless there is someone that you have appointed as your business Attorney then the disruption, loss and risk to your business could be huge.
Who would deal with the day to day running of the business bank accounts? If there is no-one this could lead to delay in staff wages, third party suppliers not being paid, business loans/mortgages not being serviced and potential contracts lost.
Many business owners act as personal guarantors for business loans, if your company went into liquidation then your personal assets including your home could also be at risk.
A business LPA allows you to appoint a person you trust to step into your shoes and make business decisions on your behalf. The range of decisions your Attorney can make include:
- Accessing your business bank accounts
- Signing contracts
- Opening and closing bank accounts
- Dealing with business property
- Investing your assets
- Dealing with tax affairs
You can appoint more than one attorney to act alongside each other, such as a business associate alongside a family member. The attorneys could be appointed to act jointly for some decisions and separately in others – i.e. the business associate could be appointed to negotiate business contracts without the family member but would not be able to access the business bank accounts without the approval of the family member.
As part of your business continuity plan it is therefore important to consider whether your business could operate if you or another director/partner became unable to do so.
Protect the business that you have worked hard to build. LPAs should be regarded as another insurance policy vital to the ongoing success of your business.