SLS Wills and More

Commercial / Business Lasting Powers of Attorney

As a business owner, it is important to consider what would happen to your business if you were unable to make decisions, such as if you were to go abroad on holiday, or for business; or you were to have an accident; or you were to have a medical condition that incapacitated you.

Consider:

  • Who will authorise the payment of bills?

  • Sign cheques?

  • Service a business loan?

  • Pay salaries?

Do not assume that a family member or a business colleague will gain the authority to make these decisions on your behalf – this assumption could leave your business exposed to risk.

Is a Commercial LPA right for my business?

A Commercial LPA will be right in most circumstances, but it is important to consider the type of business you own.

1. Sole Trader – your business is not a separate legal entity. Therefore, appointing an attorney under a Commercial LPA will be an effective way for you to make provision for the continuity of your business, in the event that you are incapacitated. Please be aware that a personal LPA for property and financial affairs may not be sufficient to look after your business interests.

2. Partnerships – check the terms of your Partnership Agreement as it may already include provision for what would happen should one of the partners become incapacitated (see below). If such a provision exists, it may already adequately provide for the continuity of the business, in which case a Commercial LPA would not be required. But if there is any doubt, then it is best to seek advice on the wording of this provision and also to ensure that any wording in your Commercial LPA does not create a conflict with the partnership agreement.

3. Directors of companies: articles of association – Very often, articles of association will provide for the termination of a director’s appointment in the event that the director loses capacity. This is often done to protect the company’s interests. Therefore, there may be no need for a Commercial LPA (See below). If you are the sole director of a small private company, the articles of association are unlikely to simply terminate the director’s appointment, or there would be no one else left to continue running the company. Therefore, a Commercial LPA would be required.

 

A Commercial LPA ensures that in advance of future unforeseen circumstances:

  • Attorney(s) are chosen and appointed by you to act on your behalf.

  • Attorneys will act on your instructions laid out in the documents – always in your best interests and those of the business.

  • Attorneys will be legally accountable for the decisions that they take.

Commercial LPAs are just as essential as:

  • Public Liability Insurance

  • Professional Indemnity Insurance

  • Business Protection Life Cover

One big difference is that this is a ‘one off cost’, not something that is paid or renewed annually, and is an allowable deduction against the cost of the business.

The cost of the Commercial Lasting Powers of Attorney are paid for by the company, and my service will include a review for £300 and only £350 per LPA – (discounts available if more than one director) plus registration fees.

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