What is a business LPA?
A business Lasting Power of Attorney, or business LPA, grants authority to your appointed attorneys to run your business on your behalf, should you become incapacitated or unable to run it yourself. The level of control given to the attorneys can be tailored to suit your individual business and its needs.
Why might you need a business LPA?
Life can be unpredictable and this means you can’t guess what may happen in the future – to you or your business. For this reason, it’s essential to know that your business will be in good hands should anything prevent you from making decisions or running it as you usually would. There are many situations where you may need a business LPA to grant authorisation to a trusted person or team. Some of these situations include:
- Chronic Illness: If you are diagnosed with a severe illness or medical condition, like dementia, you may no longer feel confident in your ability to make business decisions. A business LPA will ensure someone is running the business as you would want them to.
- Accident: Serious accidents can leave you injured or incapacitated. In situations like these, it’s important to focus on your recovery and leave essential business decisions to someone else who has the time and energy to complete the work thoroughly.
- Unforeseen Circumstances: As a business owner, you may be required to travel for work. Any time you travel, there’s a chance your plans could be delayed by events beyond your control, like a natural disaster or civil unrest. In these cases, you need someone to act on your behalf for time-sensitive business decisions.
Who needs a business LPA?
A business LPA is a good idea for all business owners, as they ensure your company will remain in good hands even if something happens to you. Planning for the unexpected is always the smart thing to do, as you never know when a sudden illness or accident could leave you incapacitated. You may consider a business LPA if you’re a:
- Sole Trader: Any person who is a sole trader should consider a business LPA because they are not a separate legal entity to their business.
- Self-Employed Individual: Someone who is self-employed should obtain a business LPA so that someone can continue running the business in their absence. Otherwise, the operation could collapse quickly.
- Company Director: Any company directors may want a business LPA, especially if their incapacitation is not covered by the Articles of Association or Memorandum of Association.
- A Partner within a Partnership: If you are part of a partnership, you need a business LPA so that your attorneys can be your voice while you’re incapacitated. You want to ensure someone is representing your ideas and opinions so that the other partner doesn’t make all decisions.
What can happen if you don’t have a business LPA?
Without a proper plan in place, your business could face harsh consequences if you become unable to run things. If you don’t have a business LPA, your business could face the following consequences if anything were to happen to you in the future that meant you were unable to run your business:
- Frozen Accounts: If you are a business owner and lose the capacity to run your business, the bank may freeze all accounts. This could be disastrous for your operations as no one will have access to necessary funds, making it impossible to do business.
- Mismanaged Company: Without a legally binding business LPA, the day-to-day operations of your business could be handed over to someone you don’t necessarily trust. A business LPA allows you the opportunity to appoint precisely who you want and sets specific rules about the authority they will have in your absence.
- Costly Court Proceedings: Employees of your business will have no legal claim to help run things in your absence. To gain this authority, they will have to obtain a deputyship order in the Court of Protection, which can take time and cost a significant amount in legal fees.
Our process
Setting up a business LPA follows a similar process to that of a standard LPA, however depending on your business and how it’s run, each case will be different. You can expect to follow similar steps when working with your business LPA solicitor through the process:
Step 1: First discussion about your case – when you instruct us as your solicitor, we’ll talk to you about your business, how it’s run and who you’d like to appoint as the person to step in and run it in the future if you ever became incapable.
Step 2: Choosing your attorneys – you should have a clear idea of who you’d like to appoint as your attorneys at this stage, and we’ll discuss with you whether they are the right people to appoint. We can also advise you on how much control your attorneys should have and what parts of your business they should manage.
Step 3: Drafting the document – at this stage, we’ll begin drafting the business LPA for you, ensuring we reflect your wishes. We’ll always keep you up to date throughout the process, and tailor our approach to make sure your business will be running how you want. Throughout this part of the process, your solicitor will be your certificate provider, which means they will confirm that you fully understand the business LPA and entered it willingly.
Step 4: Registering your business LPA – we’ll take care of registering your business LPA on your behalf with the Office of the Public Guardian. This will ensure it’s ready to be used if it becomes necessary in the future.
Step 5: Continued support – our job doesn’t stop there. If your business grows or changes, we can help amend your business LPA and keep it up to date.
Why choose Fisher Jones Greenwood
For more than four decades, Fisher Jones Greenwood has provided expert legal advice to individuals and businesses alike, across Essex, Suffolk and London. Whether you’ve just set up your first business or have been running one for years, we’re here to help.
Our approaches, while tailored to your unique situation, will always be clear and concise, with plain English explanations to get rid of legal jargon that can be confusing.
We’re transparent and honest with our advice and our fees, so you know where you stand and you won’t be hit with surprise costs throughout your process.
National scale, proven expertise
Fisher Jones Greenwood is part of Lawfront, a national group of regional law firms. Together, our private client teams total almost 180 specialists and hold seven Legal 500 rankings nationally, including three Tier 1.
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