A Lasting Power of Attorney (‘LPA’) is a powerful document in which you appoint people of your choosing to make certain decisions on your behalf if you were unable to make those decisions yourself. There are two types of LPA: one relating to your property and finances; and one in relation to your health and welfare.
If you are a business owner, it is important to consider who should deal with any decisions in relation to your business if you were unable to do so. This could be temporary whilst you are away or for the future, in the event that you have an accident or suffer from an illness.
You may feel that your personal Attorneys have the necessary/appropriate skills to deal with your business for you, in which case you could have one financial LPA in place, with an accompanying letter of wishes as guidance to your Attorneys.
Alternatively, you may not wish the same Attorney’s who you have appointed in your personal life to oversee your business affairs and it might not be the case that someone will automatically be able to take on any responsibilities in relation to your business for you. It is possible to put in place a further, separate, LPA appointing different Attorneys to deal solely with your business affairs if this would be more suitable for you and your business.
It is important to distinguish between different types of business, as what powers your attorney has over your business interests and how things operate, will vary dependent on the structure.
Your business is unlikely to have a separate legal entity to you; usually you are the business which would mean the business could come to a grinding half if you were to lose capacity. Having an Attorney in place who can step into your shoes and make decisions in relation to your businesses for you could be invaluable.
Partnerships and LLP’s
Your Partnership/LLP may be subject to the terms of a Partnership/LLP Agreement, alongside relevant legislation. Your Partnership/LLP Agreement may include provision relating to the loss of capacity of one of the partners but it would still be advisable to have an LPA in place alongside the Agreement t deal with your personal financial affairs.
If you are the director of a limited company, you should check the position in relation to removal of a director in the event of incapacity. A director’s appointment is personal and cannot be delegated to another unless special articles specifically authorise this. If you are the shareholder in a company, and in particular a majority shareholder, it is vital that you have appointed an Attorney to act on your behalf if you become incapable of doing so.
Another consideration is to have a side letter in place alongside your business LPA explaining the appointment of your Attorneys and setting out how they should carry out their role to ensure your business affairs are property taken care of. You can use this side letter to set out any specific instructions as to how your business should be run.
For further information on this topic or on any other legal area, please contact John Szepietowski or Kay Stewart at Audley Chaucer Solicitors on 01372 303444 or email firstname.lastname@example.org or visit our Linkedin page.
This information was correct as of September 2021