In the complex and fast-paced world of business, planning for the unexpected is not just prudent—it’s essential.
At The Legacy Wills Company, we understand the critical role that foresight and preparation play in securing the future of your business.
That’s why we’re dedicated to providing comprehensive guidance on Business Lasting Powers of Attorney (LPAs), a crucial tool for any business owner.
Understanding Business LPAs
A Business Lasting Power of Attorney allows a business owner, or donor, to appoint a trusted attorney to make decisions about their business interests in their stead.
This appointment can prove invaluable in situations where the donor is unavailable or lacks the mental capacity to make decisions themselves.
Without a Business LPA in place, businesses are left vulnerable to a range of risks. For example, banks may freeze accounts if a key signature lacks capacity, making it difficult to pay creditors, employees, or taxes.
Contracts may become unenforceable, and investors might demand the return of their investments. The operational and financial stability of the business could be severely impacted.
The Importance of a Business LPA
Having a Business LPA in place ensures that these challenges do not arise, providing a smooth transition of decision-making power. In the absence of a Business LPA, businesses must navigate the time-consuming and uncertain process of applying to the Court of Protection for the appointment of a deputy.
This period of uncertainty can be detrimental to the business’s survival.
Despite the common practice among businesses to prepare for physical crises, such as floods or theft, few consider the implications of significant decision-makers becoming incapacitated.
A Business LPA can be a critical component of a comprehensive crisis management plan, ensuring the business’s continued operation and success.
Drafting a Business LPA
When drafting a Business LPA, it’s crucial to consider several key factors, including the nature of the business and the specific legislative requirements that may apply.
Mental capacity is a nuanced issue, requiring a careful assessment of the donor’s understanding of their business’s nature and type.
Choosing an appropriate attorney is a decision that should not be taken lightly.
The Mental Capacity Act Code of Practice emphasises the importance of selecting an attorney who is trustworthy, competent, and reliable, with the necessary skills to manage the business effectively.
Considerations for Choosing a Business Attorney
- Skills and Abilities: Does the potential attorney have the requisite skills and demonstrated ability to manage business affairs?
- Regulations and Conflicts: Are there any legal or regulatory barriers to their appointment, or potential conflicts of interest between personal and business LPAs?
- Impact on Business and Partnerships: How might the attorney’s decisions affect the business’s profitability, and could their appointment lead to disputes among partners or stakeholders?
Take Action Today
The Legacy Wills Company is here to guide you through the process of establishing a Business LPA, offering expert advice tailored to the unique needs of your business.
Don’t wait until it’s too late to safeguard the future of your business and its stakeholders.
For more information on how to protect your business with a Lasting Power of Attorney, please contact The Legacy Will Company on 0208 547 2583 or book a FREE discovery call with one of our advisors. Our team is ready to assist you in securing your business’s legacy for the future.