What is a Business Lasting Power of Attorney?

If we can help with any questions on this note, on Business Lasting Power of Attorneys or on other documents such as wills, LPAs and shareholder agreements, please contact Andrew Bradley at by email to: andrew@bradleyhayneslaw.co.uk or call us on 01905 900 919.

The Business Lasting Power of Attorney

You may have heard a lot in the news recently about personal Lasting Power of Attorney documents and the benefits and security that they provide yourself and your family. Did you know that you are also able to protect your Company by having a Business Lasting Power of Attorney?

Who should have a Business Lasting Power of Attorney?

A Business Lasting Power of Attorney is for anyone who has an interest in a business whether as an Owner, a Partner or a Director. This document provides protection for decisions which could affect the business, to ensure that your business can continue without loss of trade or goodwill.

All Directors and Partners should have a Business Lasting Power of Attorney to ensure the smooth running of the company should any one of them becoming incapacitated by way of illness or accident. By having a Business Lasting Power of Attorney, Directors are also ensuring that they are making adequate provision for the company and fulfilling the requirement to act in the best interests of the company at all times.

Many business owners feel that a Business Lasting Power of Attorney is not required for them; that a family member or another business colleague will step in to fulfil their role, but this is not a guarantee as they do not have an automatic right to make decisions on your behalf. To protect your interests and the business interests, you should consider making a Business Lasting Power of Attorney.

Sole Trader

If you are a Sole Trader, it is likely that your business will not have a separate legal entity from yourself. A Business Lasting Power of Attorney would therefore provide effective provision for your company to ensure that it can continue, in the event that you become incapacitated.

Partnership

If you are a Partner in a Partnership, you will need to check the terms of the Partnership Agreement. It may be the case that there are already provisions in place for if a Partner should become incapacitated, in which case a Business Lasting Power of Attorney would not be required. It may be the case, however, that you would like to incorporate these terms into the Partnership Agreement or take precautions to make provision by way of a Business Lasting Power of Attorney. In either event, we would be happy to discuss your requirements and provide advice of the best options available to you.

Directors of Companies

If you are a Director in a Company, you will need to check the Articles of Association. Sometimes, Articles provide for the removal of a Director, should they loose capacity. This is done to protect the company’s interests. If this provision is not included, you may wish to seek legal advice to include this in the Company’s Articles. Alternatively, Business Lasting Power of Attorney documents can be drafted for all Directors, in accordance with the Company’s Articles, which may also need to be reviewed so there is no conflict between these provisions.

What if you already have a personal Lasting Power of Attorney

It has been advised by the Office of the Public Guardian that personal and business interests should not be included on the same Lasting Power of Attorney document. This is due to the fact that it is unlikely that the same Attorneys could be able to provide the assistance required in both a personal and a professional capacity. The Office of the Public Guardian has suggested that these should be separate, but reflect the duties covered in each separately.

What if I don’t make a Business Lasting Power of Attorney

If you don’t make a Business Lasting Power of Attorney and subsequently lose capacity, it may become necessary to make an application to the Court of Protection for the appointment of a deputy to act on your behalf. This process can be very expensive, can take a long time, and provides no guarantee that the Court of Protection will appoint someone that you would have chosen to act on your behalf. This could also leave your business in a vulnerable position and open to risk.

We can help with Business Lasting Power of Attorney documents or with reviewing and amending Partnership Agreements, Shareholders Agreements and Articles of Association. If you would like to discuss these further and how they will benefit your company, please contact Andrew Bradley at by email to: andrew@bradleyhayneslaw.co.uk or call us on 01905 900 919.