Business Lasting Power of Attorney
As a business owner protecting your business, its finances, revenue streams, cashflow and employees is of utmost importance.
You will already have sought the assistance of various professionals like your bank manager, accountant and solicitor to ensure your business operates in an effective manner and remains sustainable, efficient and profitable.
As part of a robust financial plan the importance of a Business Lasting Power of Attorney (LPA) cannot be underestimated.
The loss or impairment of mental capacity can have catastrophic consequences if you have not adequately protected your business interests. Without the protection of a Business LPA your business may not be able to continue to operate. The Business LPA ensures your company can continue if you lose capacity or temporarily lose your ability to carry out corporate responsibilities through injury or illness. Anyone can lose the ability to make decisions at any age due to an accident or illness.
Appointing someone that has the ability to run your business in the event you are unable to, will ensure the business remains operational. Your appointed person (attorney) will need to take responsibility for operational and financial decisions.
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Appointing someone that has the ability to run your business in the event you are unable to, will ensure the business remains operational.
Why You Should Have A Business LPA
Without the right protections in place vital business operations can be affected including:
- Day to day running
- Management of finances including bank accounts
- Management of suppliers
- Fulfilment of contracts
- Payroll payments
- Decision making
- Paying HMRC
Unless there is a specific agreement placed in the company’s articles of association, any remaining directors will have real problems dealing with all of these issues. All of this can have adverse consequences for anyone reliant on the business finances, be that employees or your family if it forms part of their income.
Realistic consequences of a business owner losing capacity with no Business LPA are:
- Banks may freeze the accounts
- Loans can be called in
- Contracts may be invalidated
- Insurance may be invalid
"When a Business LPA is in place it also offers protection from disputes between partners, directors and shareholders and any potential financial consequences of these disputes."
What is a Lasting Power of Attorney?
As a business owner you will have analysed many different risks and threats to your business and proactively put safety measures in place. Yet preparations for owners and decision makers becoming incapacitated are rarely considered. Often the devastating consequences are little understood, or entirely unknown.
With no Business LPA it is possible for an application to the Court of Protection to be made in order to appoint a deputy. This is a lengthy (can be as much as 2 years) and incredibly expensive burden, which far surpasses the cost of setting up the LPA in the first instance.
Business LPAs are a vital aspect of an effective business continuity plan, regardless of your health. Your business could come grinding to a halt without it.
Taking professional advice is crucial in order to understand the full implications of creating a Business LPA and selecting the right attorneys. Family Matters will guide you through the process and help you appoint the right professional individuals who understand the workings, dynamics and relationships of your business.
So many people don’t think about or are advised on what can happen in the future if you do not adequately protect your business and assets. It’s important to us to help you secure your business longevity, after all it’s what you’ve worked so hard for. We’ve seen the problems and distress that can arise from a lack of planning and it’s even more devastating knowing it’s very avoidable.
The mission of Family Matters is to ensure that all of our clients are given the best advice based on their individual circumstances. We have very exacting standards, principles and work with integrity; the needs of our client is at the forefront of all times.
Our team delivers professional and confidential advice that continues to exceed the expectations of our clients and helps them protect their business interests and make intelligent financial decisions.