Through many years of working with both commercial and individual clients, the Sweeney Miller Law team recognise that specialist legal advice for each often crosses over. A good example is the importance of having a business Lasting Power of Attorney.
As the owner of a business, regardless of its size, it is important to consider what would happen if you could no longer make decisions about its day to day running. For example, this may be because:
You develop a medical condition that means you are incapacitated;
You have an accident which means that you are temporarily unable to make decisions;
You are abroad or working remotely and are unable to sign off on important matters.
To protect the interests of both you and your business, you should consider putting in place a business Lasting Power of Attorney (LPA). Something that the COVID-19 pandemic demonstrated was that we really don’t know what is ‘around the corner’.
What is a business Lasting Power of Attorney?
A business LPA is a legal document which allows you to formally appoint people (your Attorneys) to help look after your affairs by allowing them to make decisions regarding the financial aspects of your business. It can be used by your Attorneys as soon as it is registered with the Office of the Public Guardian.
Who should consider making a business LPA?
Anyone who owns a business whether as a sole trader, a member of a partnership or a director of a limited company should consider putting in place a business LPA.
It is however important to check any partnership agreement and/ or the company’s articles of association (where applicable) as these may already include provision for what should happen should one of the partners/directors become incapacitated.
Choosing a business Attorney
The Attorney(s) should be someone aged 18 or over who you trust to make decisions on your behalf. They need to understand the nature of your business so that they can step in and carry out key duties, such as authorising the payment of bills, paying salaries of employees and acting as signatory for important documents such as leases and contracts. It may also be prudent to consider appointing at least one replacement Attorney to step in should your original Attorney(s) be unable or unwilling to act.
How should my business Attorneys be appointed?
If you’re appointing more than one person, you must decide if you need them to make decisions either:
Jointly – This means that your Attorneys must agree unanimously on each and every decision. It also means that if one Attorney dies or can no longer act then all your Attorneys become unable to act. This means that your LPA would stop working unless you appoint at least one replacement Attorney; or
Jointly and severally – This means that your Attorneys can make decisions independently on their own, or collectively.
How long does it take to make a business LPA?
It is currently taking up to 20 weeks to register an LPA. This may take longer if there are mistakes in the application. To avoid any unnecessary delays with the registration, it is important to get specialist legal advice when considering and making an LPA application.
What happens if I don’t make a business LPA?
Commenting on the challenges faced if there is no business LPA in place, Sweeney Miller Law’s private client specialist Solicitor, Gemma Brown said: “If you’re unable to make business decisions yourself and do not have a business LPA in place then it may become necessary to make an application to the Court of Protection for the appointment of a Deputy. This process can be time consuming and expensive. It is therefore vital to be prepared by getting specialist advice about setting up a business LPA to ensure that the business is not impacted or held up.”
Expert team
As well as offering expert estate planning and LPA advice, Sweeney Miller Law also has a team of Company and Commercial specialists, enabling us to advise on the best options for both you and your business. To find out more, get in touch for a no obligation discussion about whether a business Lasting Power of Attorney is right for you. Please visit www.sweeneymiller.co.uk.