What is a Lasting Power of Attorney (LPA)?
A lasting power of attorney (LPA) is a legal document in which you authorise a chosen person or persons (attorneys) to make certain decisions on your behalf, when you require support, for example should you become unwell or lose the capacity to make decisions for yourself.
To ensure your wishes are carried out, and that important decisions are placed in the hands of those you trust, making a Lasting Power of Attorney (LPA) is vital. There are two types of LPA, Property and Financial Affairs, in which you can appoint attorneys to look after your property and financial affairs, and a Health and Welfare LPA, in which you can nominate attorneys to look after your social and health care needs, and if you choose to do so you can also enable your attorneys to make life sustaining treatment decisions on your behalf.
Why have a business LPA?
For business owners, whether they are partners, sole traders or company directors, unexpected incapacity (even if only temporary) can impact significantly on the business finances, potentially meaning that suppliers are not paid, staff are not paid, stock could not be purchased, business loans may go unpaid and no one else would be authorised to control the business account. You might think you could rely on family members or employees to deal with the running of the business, but they may not have the authority to do this and business colleagues do not automatically gain the authority to make decisions on your behalf.
A business LPA can be used if a business owner:
- is overseas or on holiday
- has had an accident that means they are temporarily incapacitated
- has an incapacitating medical condition that means they are no longer capable of acting
What happens without a business LPA?
If a business owner does not have a business LPA in place and any of the above situations arise, an application to the Court of Protection to appoint a deputy to act on their behalf may be needed, which can prove costly and take a significant length of time, exposing the business to a huge amount of risk.
Who is a business LPA suitable for?
- a sole trader
- a person who is self-employed
- a director of a companyif a director’s incapacitation is not covered by the articles of association or memorandum of association
- a partner within a partnershipif a partner’s incapacitation is not covered by the articles of association or memorandum of association
The LPA must be registered by the Office of the Public Guardian whilst the Donor still has mental capacity, to take effect.
A person can have a personal financial LPA, a health and welfare LPA and a business LPA, but should appoint attorneys that are suitable for each one separately.
A business attorney must be able to carry out the role and be someone suitable to undertake the responsibilities of the donor in a business LPA, and the donor should consider giving specific and detailed instructions on what powers a business attorney would hold.
Help and Advice
If you would like to discuss making an LPA or would advice from a member of our team, we have offices in Newark, Sleaford, Lincoln, Grantham, Boston or Spalding where a member of our team would be happy to help