Most people understand that a Lasting Power of Attorney (LPA) allows you to nominate someone to take decisions on your behalf, if you become incapacitated in some way.
However, it’s much less well known that an LPA can also be put in place for a business, where the sudden illness of the owner could have serious ramifications for the business and its workforce. This is especially topical given the current health crisis.
A sensible precaution
If you have a business of your own, it makes sense to have an LPA in place. Everyone your business comes into contact with, from suppliers and creditors to clients and employees, could benefit from having the trusted individual you have nominated running the business in your stead, should you become incapacitated and unable to work.
So why are LPAs for businesses so uncommon? Unfortunately, many business owners are simply unaware this is an option, even though some people fear even a temporary period of mental incapacity may lead to them permanently losing control of their business interests.
Others might be content that in circumstances where capacity is lost, the Court of Protection will appoint a deputy. It’s worth bearing in mind though, that appointing a deputy can take several months, which is plenty of time for the decision-making processes and daily operations of a business to fall apart.
Conversely, putting a business LPA in place ensures that a person you know and trust will take the reins immediately, and can begin to deal with the usual running of the business.
Make the arrangements now
A business LPA can be straightforward to organise. A Form LPF1 must be completed and signed by a witness, a ‘certificate provider’ and the chosen attorney. The form is then registered with the Office of the Public Guardian (OPG). At time of writing, the fee for registering a business LPA is £82.
It makes sense to arrange a personal LPA alongside a business LPA, but note that your personal one should stipulate that it does not cover your business affairs.
Similarly, your business LPA must state that your nominated attorney has power only over your business affairs.
The choice of attorney requires a lot of careful consideration. It is therefore important to consult an experienced team of legal advisors, who will offer support in making this decision and take all the relevant factors into consideration.