What is a Business LPA and why might you need one?

Most people are familiar with the term Lasting Power of Attorney in the context of a relative who is no longer able to make their own financial decisions due to long term illness or mental incapacity but few business owners recognise the importance of putting one in place as part of their continuity planning. Award-winning solicitor and Trusts and Estates Practitioner Helen Forster of HTF Legal explains what a Business LPA is and why you might need one.

What is a Business Lasting Power of Attorney?

A Business LPA gives legal authority to a nominated person to deal with your business affairs and make decisions on your behalf, should you ever become unable to do this yourself. In that respect, it is similar to any other type of LPA but the difference with a Business LPA is that the nominated attorney must have the technical knowledge to act on your behalf. If, for example, you are a qualified solicitor, your attorney must also be a qualified solicitor and therefore capable of carrying out your duties in your place.

Why might you need an LPA for your business?

“What many partners and directors don’t realise is that, under the Mental Health Discrimination Act, it is not possible to simply remove a fellow partner or director if they are incapacitated. Neither is it possible to make decisions on their behalf.

“A Business LPA is therefore an essential business continuity tool and every boardroom member should appoint someone suitable to act for them should they be unable to make decisions themselves.

“Ideally a Business LPA should be in place for each partner or director and should be agreed at a board meeting so that all those with a controlling role in the business are in agreement and fully aware of the contingency steps that have been put in place.

“Every business owner hopes the Business LPA will never be needed but by establishing one, they know that a person of their choosing will be able to continue to deal with their affairs, should this become necessary.”

Helen Forster is a Dementia Champion with Age UK, a member for Solicitors for the Elderly and also a member of STEP (The Society of Trusts and Estates Practitioners). For more information about Business LPAs contact Helen Forster at HTF Legal on 01937 227 830.

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