Do you need a business lasting power of attorney?
As a sole trader, partner or director of a company it is important to consider what might happen to your business if you are incapable of making required decisions yourself. Most people think of lack of capacity as a gradual process linked to old age and diseases such as Dementia or Alzheimer’s.
However, this is not always the case. You may be incapable of making an urgent business decision simply because you are out of the country and not contactable. Alternatively, you may have a serious accident resulting in physical and possibly mental incapacity.
Informal discussions with your employees and co-owners/directors may provide guidance in such situations but will not allow anyone to represent you legally and take the required action. Unless you have formally appointed an attorney to represent you, your business may be in limbo. It may not be possible to access bank accounts to pay staff and suppliers, contracts may be jeopardised or even lost, loans may remain unpaid resulting in financial penalties, insurance policies may expire exposing you to personal liability and the reputation of the business may suffer as a result of all these issues.
A lasting power of attorney covering your business interests only will ensure that a trusted person, chosen by you, can step into your shoes and continue to run the business until you can return to work yourself. Your business attorney should understand the way your business operates, be aware of any regulatory requirements your business is subject to and make decisions with a full understanding of the long-term consequences (i.e. he or she should be suitably qualified).
Before appointing a business attorney, it is important to consider the partnership agreement or company articles of association which govern your business. You will also have to ensure that the person you are appointing is not conflicted in their interests. You may also wish to update your business plan and ensure that your attorney is aware of any emergency procedures that have been put in place.
We can advise you on drawing up a business lasting power of attorney and review your ancillary documents such as your articles of association or emergency procedures. Please contact a member of the Private Client enquiry team on +44 (0)1733 887675 who will refer you to a legal advisor in a location convenient to you.
This update is for general purposes and guidance only and does not constitute legal or professional advice. You should seek legal advice before relying on its content. This update relates to the prevailing circumstances at the date of its original publication and may not have been updated to reflect subsequent developments. If you have general queries about our updates, please email: firstname.lastname@example.org