Why businesses should consider LPAs

A lasting power of attorney has become a common feature in people’s personal arrangements for the future. Alongside wills and trusts, LPAs are increasingly seen as an important mechanism for enabling someone to take care of another person’s needs.

But LPAs can protect the needs of a business, as well as those of an individual. Our Head of Department, Christian Sereni, explains how:

What is an LPA?

An LPA is a formal legal document that gives a person (the ‘attorney’) authority to take certain steps and make important decisions in the interests of another person who has lost the ability to do that for themselves. These actions can be about the LPA-maker’s health and welfare, or their finances and property (and often both).

Who can make an LPA?

Anyone aged 18 and over can make an LPA, as long as they have mental capacity. If a person has lost mental capacity, it’s too late.

Why should a business have an LPA?

An LPA can enable a business to continue if something happens to the person at the helm. This may be particularly important in small businesses that rely on just one person to run them, without the ability of someone else to step up if needed. Some people assume a family member, friend or another person in the business could simply take over, but that won’t necessarily be the case as they may not have the legal authority to do so.  

Having an LPA in place means if the main person is incapacitated and unable to make day-to-day decisions (perhaps they’ve had an accident or are suffering an illness, for example), another trusted person can keep the business going. They can make managerial decisions, authorise payments (rent, wages, etc), continue to honour contracts. 

Should people have separate LPAs for their personal lives and for their business?

As a rule of thumb, if yours is the type of business that would suffer were you to be out of action, it would be wise to have a business LPA. We would also advise having a personal LPA (either for health and wellbeing, or for finances and property, or ideally both).

It’s possible that these LPAs would never be needed. However, they offer a layer of protection that can provide great peace of mind.

For advice about business LPAs or personal LPAs, contact our team on info@bsandi.co.uk or call now on 01264 353411.