Business Lasting Powers of Attorney (LPA)
A Business LPA is a property and financial affairs LPA with specific instructions for your business. This will be a separate LPA document from the property and financial affairs LPA used for personal use.
What is the purpose of a Business Lasting Power of Attorney?
A Business LPA allows you to appoint an attorney or attorneys to make decisions on your behalf. If you have more than one attorney, you can decide if you want them to be able to make decisions independently, or together. You might appoint Professional Attorneys or people you know and trust to be your attorneys.
It is up to you who you appoint as Attorneys, however they must be over the age 18, have mental capacity, and must not be bankrupt. It is sensible to appoint someone who understands your business so that they can make appropriate decisions. It is also important to trust them enough to act in your best interests.
You can also appoint reserve attorneys. This is useful if the attorneys you appoint are unable or unwilling to act when required.
What can an appointed attorney do?
An attorney appointed in a Business Lasting Power of Attorney will have the responsibility of making decisions as you would. You can help the attorney by defining what they can and can’t do in the LPA document, and you can also include preferences which are not legally binding, but the attorney should take these into account whilst making decisions.
Registering your Business Lasting Power of Attorney
A Business LPA cannot be used until it has been registered with the Office of the Public Guardian. You can decide at outset whether the LPA can be used as soon as it is registered, or only once you have lost capacity. There is a registration fee, payable to the Office of the Public Guardian (currently £82) and registration can take up to 12 weeks, so it should be done as soon as possible after the Business LPA is made.
Who should have a Business Lasting Power of Attorney?
Sole traders, partners in a partnership and controlling directors of a limited company might need a Business LPA. Without the powers afforded to attorneys in a Business LPA the company could stop being able to function properly which could affect cashflow, goodwill and the reputation of the company.
This could directly or indirectly affect the income of the business owner’s family either in the short term, or permanently, especially if the business is forced out of business because it has its hands tied when decisions need to be made.
What if there isn’t a Business Lasting Power of Attorney?
An application can be made to the Court of Protection to appoint a deputy. This process can take up to 9 months, and the court fees and solicitors fees would be much higher compared to setting up a Business Lasting Power of Attorney.
The waiting period to get the deputyship in place could be catastrophic for the business. The powers of a deputy are usually less than an Attorney, and they are much more accountable, having to have their decisions assessed at the end of each year, and annual costs are attached to this too.
The deputyship can only be applied for if the business owner has permanently lost mental capacity. The LPA could be used for example if the donor was in hospital, or overseas when important documentation needed signing.
This Business LPA could make the difference between a deal happening or a deal breaking down, or finances being available or not available in a variety of different circumstances.
How can I get a Business Lasting Power of Attorney?
You can create a business LPA yourself, however, it is important to ensure that your LPA does exactly what you need it to, and you can avoid the many pitfalls which will invalidate your document.
Goodwills has made over 15,000 LPAs and EPAs since 2003 and has regular dealings with both the Office of the Public Guardian and the Court of Protection. We charge a competitive professional fee to complete your business LPA and deal with the Office of Public Guardian to get it registered.
Storing a Business Lasing Power of Attorney
It is easy for a Business LPA to get lost, stolen, damaged, destroyed or defaced. It is important that it can be found quickly when needed.
If you do not intend to use the LPA immediately, we can store the document on your behalf. We have secure fireproof and floodproof facilities, and are insured in case the documents get damaged, lost or destroyed whilst in our care. Documents in our care can usually be returned to the donor within 10 working days.
Business LPA frequently asked questions (FAQ)
Can we have a business LPA that covers all the owners of a business?
Individual LPA documents will need to be created for each member of the business and each document will need to be registered separately. There will be a registration fee for each LPA that needs to be registered.
How long does a Business LPA last for?
A business LPA will last for the life of the donor (the person who the LPA is for), however, the donor can revoke the LPA if they have the mental capacity to do so.
What if a Business LPA is lost and cannot be found?
If the document has been registered, office copies can be requested, and these can be used as the original document could. There is a charge made by the Office of the Public Guardian for issuing office copies.
If the document has not yet been registered, then a new LPA would need to be created. This is only possible if the donor has the mental capacity to do so.
What if I am an owner of multiple businesses?
You can name which businesses you want the Attorney to be able to make decisions for. You can also give the attorney different decision-making capabilities for different businesses too.
Can the LPA be used for business decisions after the donor has died?
No, not under any circumstances. It is important to add business continuation clauses in your Will if you would want your attorneys or somebody else to continue to act after your death. This is a different mechanism, and will work in a different way, but will ensure that the business can continue whilst Probate is being dealt with which might take six months or longer to administer.