Many people know about the importance of appointing an attorney to handle their personal finances, but the need for a Business Lasting Power of Attorney, or LPA, is often overlooked.
Some business owners will have ‘Key Man Insurance’ in place, and/or will have looked into succession and exit planning.
Even when a transition is planned, such as the retirement of a Managing Director, the upheaval can bring many problems. However, these become insignificant when compared to the disruption that can be caused by the unexpected loss of a business owner through illness or serious injury, even if the loss is only temporary. It is common for the possibility of incapacity to not be considered until it is too late.
If one of the owners or Directors were to temporarily or permanently lose the capacity to make decisions, they also lose the right to decide who has authority to make those decisions for them because an LPA must be created before incapacity strikes.
Jonathan Saunders, a Solicitor at Palmers’ Basildon office said: “Creating an LPA and choosing your attorneys are important business decisions to make as there are companies where the futures of employees, suppliers and customers are entirely dependent on the health of a few individuals.
“Appointing an attorney is like taking out a form of insurance for your business; it is the peace of mind of knowing that someone you trust will take care of things if you are no longer able to do so. Without an LPA, your trusted individual would not have an automatic right to handle your affairs and there is no guarantee of what would happen to your business.
Palmers suggest that when choosing an attorney, you appoint an individual that you not only trust, but who is also familiar with the business and how it operates.
Of course, it is normal to hope that you will never need an LPA, but having one in place will be a small price to pay for the knowledge that, in the event of your incapacity, your business will continue successfully in safe hands.