Business LPA - Why It's Important When You Own Your Own Business
Protecting Your Business Interests with a Business LPA
If you own a business, setting up a Business Lasting Power of Attorney (Business LPA) is a crucial step in safeguarding your company. A Business LPA, sometimes referred to as a Commercial LPA, allows your chosen attorney(s) to manage your business affairs if you're unable to do so. This is separate from your Property & Financial Affairs LPA for personal matters, ensuring that your business interests are properly handled by someone you trust.
Why Consider a Business LPA?
A Business LPA can help protect your business continuity and ensure that essential decisions are made if you're incapacitated or otherwise unable to act. However, the effectiveness of a Business LPA depends on several factors:
- Restrictions in the Business LPA document: Specific limitations you may place on your attorney's authority.
- The company’s articles of association: If your business is a company, the articles may impose restrictions on who can make decisions.
- The partnership agreement: For partnerships, the agreement may detail whether an LPA attorney can act on behalf of a partner. If no agreement exists, the Partnership Act 1890 will apply.
Understanding Your Options with a Business LPA
- Sole Traders: If you are a sole trader, your Property & Financial Affairs LPA can include business matters. However, ensure any restrictions in the LPA are considered. In some cases, you may not need a separate LPA specifically for business.
- Partners in a Business: Check your partnership agreement for any terms about an attorney acting on behalf of a partner. Without an agreement, the Partnership Act 1890 will govern what actions can be taken.
- Company Directors: If you're a director, note that a Business LPA may not cover the duties assigned to your role. A director's responsibilities are personal, meaning an attorney can't automatically act in your place. If your company uses model articles, the board of directors must make decisions regarding appointing someone to manage business affairs.
Benefits of a Business LPA
- Business Continuity: A Business LPA can help maintain stability during unforeseen circumstances.
- Clear Decision-Making: It allows for a trusted individual to make important business decisions.
- Protects Your Interests: Business LPAs ensure your business is managed according to your wishes.
Get Expert Advice on Business LPAs
Setting up a Business LPA requires careful consideration of your business structure and legal obligations. Contact us to discuss how a Business LPA can benefit your business and help you prepare for the future. Our experienced solicitors can guide you through the process to ensure that your business interests are fully protected.
To speak to a member of the team about Business LPAs, please contact us on 0113 320 5000 or email us at wills&probate@winstonsolicitors.co.uk.
