Keeping Control: Who Will Manage your Business if you Cannot?
Whilst many people think about appointing others to manage their personal affairs in the event of changed circumstances, rather fewer make similar arrangements for a business. The way in which you can appoint others to manage your affairs is through a Lasting Power of Attorney (LPA).
A Summary of Personal LPAs
- A personal LPA lets you appoint trusted people (your attorneys) to make decisions on your behalf about your personal affairs.
- There are two types of personal LPA – one that deals with your property and financial affairs, and another that covers your health and welfare. Their predecessor, the Enduring Power of Attorney (EPA), dealt only with property and financial affairs. EPAs are still valid if they have been signed, but you cannot now make new ones, or make changes to existing ones.
LPAs are usually drawn up to manage personal affairs, but they can also be used for businesses.
What is a Business LPA?
- A Business LPA is a Property & Financial affairs LPA which is tailored to allow you to appoint in advance one or more people to deal with the property and financial aspects of your business.
- If you have more than one business, you can assign them different attorneys – either within the same LPA or with a separate LPA for each business. You can also allocate responsibilities for specific areas to each attorney.
- A Business LPA can be used - with your permission - even if you still have your mental faculties.
Why Might you Need a Business LPA?
- For the management of your business during an absence, whether enforced or planned (perhaps while you have that trip of a lifetime!).
- To cover the illness or incapacity of yourself or other key persons. You may have made plans to deal with a permanent change in circumstances, but have you considered how you would manage a temporary emergency?
- In the event of a reduction in your physical capacity, such as impaired mobility or an injury to your normal signing arm.
- To manage a short-term loss of mental capacity - safeguarding your business in the interim, but allowing you to resume control on your recovery.
- To avoid detrimental actions from third parties. For example, banks may freeze accounts when a signatory loses mental capacity, or realize charges against business assets in the event of a financing default, in as little as 28 days.
Take Control Now!
- Recognise the possibility of future incapacity as a business risk, and mitigate it with a Business LPA. View it as an insurance policy to safeguard your livelihood.
- Appoint people to act as your attorneys if you become incapable, or if you choose to have them to act for you.
- Even if your LPA is never needed, it will give peace of mind to you, your business partners and loved ones.…
- and the good news is that it is a business expense that can be offset against tax!
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