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Lasting power of attorney (LPA) documents can provide a crucial safeguard for business owners and directors, allowing you to appoint an attorney to make important decisions on your behalf if you are rendered unable to do so at some point in the future.
Whether due to health-related issues or an unexpected absence from the UK, the sudden loss of ability to make vital business decisions can potentially be catastrophic. An LPA ensures continuity even under unforeseen circumstances, allowing the day-to-day running of the business to carry on, overseen by a trusted individual that you yourself have selected for the role.
It is also essential to consider the Articles of Association of your business to ensure that an LPA does not contradict the provisions governing the management of the business.
The wills and probate team at JMW Solicitors is ideally placed to guide you through the legal process involved in creating a business LPA, helping you select the right attorney and tailor the document itself to reflect the specific needs and conditions of your organisation.
How JMW Can Help
Our expert wills, trust and estate planning solicitors have assisted many private and commercial clients set up personal and business LPAs, and are dedicated to making the process as simple and stress-free as possible.
We can explain the entire process, discussing the various dynamics of your business situation before drawing up an LPA document that provides you with the security and safeguards that you require.
The team at JMW Solicitors regularly gives seminars on wills, trusts and estate planning, Inheritance Tax and other related topics, while several of our lawyers are also members of the highly-respected Society of Trust and Estate Practitioners (STEP). This underlines our significant expertise in this sector.
We have also been regularly hailed as an industry leader in the Chambers and Legal 500 guides, with Chambers 2019 noting that we place “uppermost value on building close working relationships with [our] clients”.
How does a lasting power of attorney work?
A lasting power of attorney (LPA) is a document that designates another person or several people as having the authority to make decisions on your behalf, and it is activated in circumstances where you have lost the capacity to do so yourself.
To make an LPA, you must be over the age of 18 and have sufficient mental capacity to make the document. It is not possible to make an LPA on another person’s behalf, so this must be done personally.
Who can I appoint as my attorney?
All sorts of people can be appointed as an attorney under an LPA, including:
- Your spouse or civil partner
- Your children (as long as they are over 18)
- A family member
- A close friend
- An accountant
- A solicitor
- A business partner
You should look to appoint a business attorney who is trustworthy, and who understands the specific dynamics of your business and how you would like it to be run. It is possible to appoint more than one attorney, and you can specify in your LPA whether you would like them to take decisions jointly or independently.
What kind of affairs can my attorney handle?
As your business attorney, the individuals named in your LPA will be able to take responsibility for a number of different tasks, including:
- Accessing business bank accounts and dealing with financial matters
- Paying staff
- Handling tax affairs
- Ensuring contracts are upheld
- Addressing regulatory requirements
You can place restrictions within the LPA document to limit what your attorney can do on your behalf, and offer written guidance to your attorneys as part of the LPA process.
Who is a business LPA suitable for?
Business LPAs are suitable in the following cases:
- For sole traders and self-employed people, who are not considered to be separate legal entities to their businesses
- A partner within a partnership, in cases where partnership agreement does not include provisions for a partner’s incapacitation
- A director of a company, if the company’s articles of association do not prohibit the delegation of their responsibilities in case of incapacitation
What is the difference between lasting power of attorney and Court of Protection deputyship?
LPAs allow an individual to nominate another to make legal and financial decisions on their behalf in case of future incapacitation, while Court of Protection deputyship is used when the person in question has already become incapacitated, meaning another person has to request from the Court the ability to handle their affairs.
The latter can be a costly and time-consuming process, and could leave your business without leadership for several months. It also prevents you from having a say in choosing the deputy personally, which is why business LPAs are generally regarded as preferable.
Can I use the same attorney for my personal LPA and business LPA?
It is theoretically possible to do so, but in many cases this can lead to problems relating to conflicts of interest, regulatory requirements or company rules, meaning this is an option that should be considered with caution.