It is important for any business owner to consider what might happen to the day-to-day running of their business if they were unable to make decisions.
Much focus is given, quite rightly, to an individual needing to have a Lasting Power of Attorney (LPA) in place to allow those nominated to make decisions on their behalf (for example if they became incapacitated). However, for business owners, sole traders and partners, having a business LPA in place is something that is often overlooked. In many cases, this is just as important as a personal LPA, as without a business LPA in place to designate who has authority to assume control, the business can be exposed to significant risk.
A business LPA can be useful, for example, if the business owner is:
Without provision in place, fundamental business activities could grind to a halt whilst the slow and costly Court of Protection procedure is pursued to enable decisions to be made.
This is a possibility, and for partnerships and limited companies, we would recommend that you review your Articles/Memorandum of Association with your solicitor, to see whether they include provision to ensure business continuity.
However, in many cases, this is not covered, and for sole traders and the self-employed, a business LPA should be considered, as they and their business interests are not separate legal entities.
Our experience has shown that in the majority of cases, a business owner will nominate different individuals to look after the day-to-day running of the business to those looking after their personal affairs (indeed their business partners/fellow directors are likely to want to be involved in business decisions, but perhaps not appropriate to be involved in a personal LPA as these are fundamentally different aspects of life).
We would be happy to work alongside your solicitor or introduce you to one of our trusted legal contacts who will be able to review your existing legal documentation and, if required, help you put the right steps in place. If you would like to discuss any of the above, please contact your usual Partners Wealth Management adviser, email us or call us on 020 7444 4030.
For further information on how we can help you build and protect your wealth, please contact us.
