What Is A Business Lasting Power Of Attorney, And Do I Need One?

• Published date: 09 June 2022
• Subject Matter: Finance and Banking, Corporate/Commercial Law, Financial Services, Corporate and Company Law, Contracts and Commercial Law
• Law Firm: Harrison Drury Solicitors
• Author: Ms Scarlett Richardson

Scarlett Richardson, a solicitor from Harrison Drury's private client team, outlines the reasons why you may consider preparing a Business Lasting Power of Attorney to protect your business interests.

As a business owner, it's important to consider what may happen to your business if you are unable to continue making important business decisions. This may be due to ill health, an accident, or long-term illness. It may also be due to you being abroad and unable to attend important meetings or sign contractual paperwork and agreements.

This is particularly relevant at present given the often-changing restrictions between traveling to and from other countries due to the COVID-19 pandemic, which may leave you unexpectedly unavailable to deal with important business matters.

If you were to lose capacity to make essential business decisions for any of the reasons above, there are several matters that would need to be addressed:

• Would your bank freeze your business account?
• Who would approve payment of wages to your employees?
• How would you agree contracts for the supply of goods within your business?
• How would you comply with standards set by your regulatory body?

The short answer is that without a Business Lasting Power of Attorney (BLPA) in place you may struggle to deal with these matters. This may cause your business to cease trading or be in breach of certain contracts or legislation.

What is a Lasting Power of Attorney?

A Lasting Power of Attorney (LPA) enables people to choose someone they trust to make decisions on their behalf if they are no longer able to make decisions for themselves. It is a formal document whereby the 'donor' appoints one or more person (the 'attorneys') to manage their property and finances and/or health and welfare.

These decisions could be required if you lose capacity on a permanent basis, are involved in an accident and temporarily incapacitated or you are away and not present to sign important documents.

You can learn out more about LPAs in our previous blog post: Lasting Power of Attorney - The importance of making the right choice.

Do you need both a business LPA and a personal LPA?

A Business Lasting Power of Attorney is a Lasting Power of Attorney that is restricted to decisions regarding your business. Therefore, it is likely to mean you may need several Lasting Powers of Attorney running concurrently. You may have one...