The importance of Business LPAs

Why Every Business Owner Should Consider a Business Lasting Power of Attorney

Many business owners plan for tax, growth and succession — but very few plan for something far more immediate: what happens if you suddenly cannot make decisions.

Illness, accident, stroke, or even a temporary loss of mental capacity can stop you from running your business overnight. When that happens, bank accounts can be frozen, contracts cannot be signed, staff cannot be paid and the company can quickly grind to a halt.

A Business Lasting Power of Attorney (Business LPA) exists to prevent exactly that situation.

What is a Business LPA?

A Business LPA is a legal document that allows you (the business owner) to appoint one or more trusted people to make business decisions on your behalf if you lose mental capacity.

It only takes effect when you cannot act yourself.

Importantly, it is separate from your personal LPA. Your spouse or children may be the right people to manage your home and finances — but not necessarily your company, staff or commercial decisions.

A Business LPA allows you to choose the right person specifically for your business affairs, such as:

• A co-director

• Business partner

• Senior employee

• Accountant or trusted adviser

Why is it so important?

Many owners assume their spouse, co-director or accountant could simply step in. Unfortunately, the law does not allow this.

If you lose capacity without a Business LPA:

• The bank will likely freeze business accounts

• Contracts cannot legally be signed

• Payroll may stop

• Suppliers may not be paid

• Staff could leave

• The business could fail — even if only temporarily

Your family or colleagues would then have to apply to the Court to be appointed as a Deputy. This process typically takes months and can be expensive and restrictive. By the time authority is granted, serious damage to the business may already have occurred.

A Business LPA avoids that risk by giving immediate legal authority to the person you chose in advance.

Advantages of a Business LPA

Business continuity
The company can continue operating without interruption if you are unable to act.

Access to bank accounts
Your appointed attorney can manage banking, payroll and expenses immediately.

Protects staff and clients
Employees continue to be paid and customers continue to be served.

You choose the decision-maker
You appoint someone who understands the business — not whoever the court decides.

Avoids court delays
Prevents the lengthy and costly Deputyship application process.

Peace of mind
Your business, income and reputation are protected even in unexpected circumstances.

A vital but overlooked safeguard

Most business owners insure buildings, stock and liability — yet the greatest risk is often the temporary loss of the person running the business.

A Business LPA protects the engine of the company: decision-making authority.

Without it, even a short period of incapacity can cause long-term damage.
With it, the business continues, staff are protected, and your family income remains secure.

In simple terms:
A Will protects your business when you die.
A Business LPA protects your business while you are still alive.

If you run a company, partnership or are self-employed, it is one of the most important documents you can put in place.

Contact Secure Wills to discuss further.