Why business owners need a Commercial LPA
Lasting Powers of Attorney are not just for individuals. Business owners can also take advantage of the peace of mind having an LPA brings.
Anyone can (and should) have an LPA. A Lasting Power of Attorney allows you to grant legal power to someone else to make decisions about your financial situation, medical treatment and other affairs, if you lose the mental capacity to make them yourself. However, a standard LPA will not cover an individual’s business, if they have one. Therefore, business owners should talk to their solicitor about making a Commercial LPA.
In this article, we’ll look at what Commercial LPAs are, why you need one and how to get one. Let’s find out more.
What is a Commercial LPA?
A Commercial LPA sets down who can take control of business decisions if the owner of the business is not around or does not have the mental capabilities to make decisions for themselves. It will usually come into effect if the business owner becomes incapacitated because of an accident or a mental condition. However, owners can also appoint attorneys to act on their behalf if they go on holiday.
Commercial LPAs are suitable for sole traders, self-employed people, company directors and partners. If an individual has interests in multiple companies, they can create different LPA’s for each company.
Why do you need a Commercial LPA?
Think about what would happen if you were suddenly not able to make decisions in your business. Would your staff and suppliers get paid? Who would have control of your business bank account? How long would it take before you no longer had a business at all?
You might think you could rely on your colleagues, but do they have the best interests of the business at heart? If you’re a one-man-band, you don’t even have this option. You may expect family members to step in to help, but do they have the necessary skills?
If you became incapacitated without a Commercial LPA in place, you might need to apply to the Court to appoint a deputy, which can be a time-consuming and expensive process. Why go through that, potentially risking your business, when you can set a Commercial LPA up now?
Why do you need a solicitor to create your Commercial LPA?
Because every business is different, every Commercial LPA needs to be different. When you create your LPA, you define precisely what authority your attorney has, as well as what they do not have. For these reasons, a Commercial LPA is not a document you can get off-the-shelf or something you can try to do yourself. It’s imperative that you employ a solicitor.
Commercial LPAs can be quite complex documents, because they refer to elements of the Mental Capacity Act of 2005, as well as the Companies Act of 2006. These two acts work independently and do not always complement each other. A solicitor knows their way around these laws and can create a Commercial LPA that fulfils your objectives, is legally watertight and within existing law. Without the expertise of a solicitor, your Commercial LPA might be open to legal challenges, which could put your business at risk.
Find out more from Couchman Hanson
If you’re thinking of setting up a Commercial LPA, it’s essential that you talk to a solicitor. Don’t leave things to chance. Don’t try to do a solicitor’s job yourself.
At Couchman Hanson, our solicitors genuinely care about getting the best outcome for you. We’re highly professional, with ‘city’ level talent and experience, but also friendly and welcoming. Everything we do fits with our values of integrity, honesty and authenticity.
Call 01428 722189 or email enquiries@couchmanhanson.co.uk