Tony Byrne, managing director of Wealth & Tax Management, discusses the benefits and peace of mind of a Business Lasting Power of Attorney
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IF YOU are a shareholder, partner, sole trader or director and become incapacitated through illness or injury, your business is at risk if you do not have a Business Lasting Power of Attorney.
The concept of a personal Lasting Power of Attorney – LPA – for both property and financial affairs and health and welfare is well known but a business owner should have a separate Business LPA for their financial affairs to deal specifically with their business.
Why do I need a Business Lasting Power of Attorney?
You need a Business Lasting Power of Attorney in order to appoint someone to act on your behalf in connection with your business so that fundamental business operations can continue if you become incapacitated.
If a business owner becomes incapacitated without a Business LPA, the implications can have a detrimental impact on the business including:
– The running of the business on a day to day basis;
– The management of the business finances;
– The business decisions;
-The banks may freeze the business account;
-Loans can be called in by the bank;
-The mechanism for decision-making can be frozen;
-Contracts may not be entered into or remain valid.
In short, your business could be in breach of its regulatory obligations if a key business owner is incapacitated and measures are not in place. It could lead to your business failure.
Once in place the Business LPA will allow your business attorneys to manage the business and run it in your place.
What if I do not make a Business LPA?
If you do not have a Business LPA – or, indeed, a personal LPA – and become incapacitated, a Deputy will need to be appointed by the Court of Protection.
A Deputyship application is a costly exercise and can take between six and nine months to be processed. Additionally, you do not get to choose who the Deputy is so you will not know who the caretaker of your business is and how they will manage it.
If you are interested in discussing ways to protect your business, join us for a one-hour Discovery Meeting either at our offices or by a video conference call at our expense worth £270 to each of the first three readers who contact us before September 30. You know it makes sense. We offer a great cup of coffee too – but unfortunately not a virtual one.
Ring us on 01908 523740 or for free on 0800 980 4516 or email wealth@wealthandtax.co.uk.
The contents of this article are for information purposes only and do not constitute individual advice.
