Business Powers of Attorney – What You Need to Know

A guide to business powers of attorney

A Lasting Power of Attorney (LPA) is a legal document. It allows the ‘donor’ to appoint one or more people (called ‘attorneys’) to help make decisions or act on their behalf. This is particularly useful if the donor becomes unable to make decisions for themselves in the future.

A Business LPA is specifically designed for business owners. It gives peace of mind that, if you become unwell or have an accident, someone you trust can continue running your business.

Why a Business LPA matters

If a business owner becomes incapacitated, they may no longer be able to manage the day-to-day running of the business. A Business LPA allows someone else to step in and make key decisions. This ensures the continuity of operations and protects the future of the business.

A Business LPA allows you to prepare in advance. It ensures that trusted individuals can deal with your affairs and act in the best interests of the business.

Who should consider a Business Powers of Attorney?

All business owners should consider making a Business LPA. Those who may particularly benefit include:

• Sole Traders – Your business is not a separate legal entity. An LPA helps to ensure business continuity if you lose capacity.
• Self-employed individuals – Similar to sole traders, an LPA can allow your business to keep operating if you’re unable to act.
• Company Directors – If your company’s Articles don’t already cover incapacity, a Business LPA lets you appoint someone to act on your behalf.
• Partners in a partnership – If there is no partnership agreement that deals with incapacity, a Business LPA provides protection and continuity.

If you frequently travel or spend time abroad, a Business LPA is also advisable. It allows someone to act for you when you’re away.

What can an Attorney do under a Business LPA?

Attorneys can carry out a range of duties under a Business LPA, such as:

• Managing business bank accounts
• Paying suppliers and bills
• Handling payroll and staff matters
• Entering into or completing contracts

Choosing your Attorney

It may be possible to have one LPA that covers both personal and business affairs. However, the role of a business attorney can be demanding. You should choose someone you trust and who has the necessary skills and experience to act on your behalf.

What happens if there is no Business LPA?

If you lose capacity without a Business LPA, someone will need to apply to the Court of Protection. They would seek a Deputyship Order to manage your business affairs.

This process is often time-consuming and expensive. It includes application fees and ongoing charges while the Deputy is in place. During this period, the business may face significant disruption due to lack of leadership and decision-making authority.

Want to set up a Business LPA?

If you are interested to find out more about Business LPAs and would like to set one up, please contact our Commercial and IP team at commercial@mlplaw.co.uk
We can advise you on business affairs and succession planning, ensuring your business remains protected and well-managed.