Running a business involves making critical decisions and managing important affairs. However, unforeseen circumstances can arise, such as illness, accidents, or incapacity, which may temporarily or permanently incapacitate a business owner. In such situations, it is crucial that business owners have a Lasting Power of Attorney (LPA). An LPA allows a designated individual to make important decisions and act on behalf of the business owner, ensuring the continuity and smooth functioning of the business.
Let’s explore the significance of having an LPA as a business owner.
| Decision-Making Authority
An LPA grants authority to a trusted person (the attorney), to make decisions on behalf of the business owner. This legal document outlines the specific powers granted to the attorney. For example, managing finances, signing contracts, accessing bank accounts or making operational decisions. By making an LPA, a business owner ensures that their affairs are properly handled if they become incapable of managing them independently.
| Business Continuity
In the absence of a Lasting Power of Attorney, an incapacitated business owner may leave the business in a state of uncertainty. Critical decisions may be delayed, financial matters may go unaddressed, and operations could suffer. By appointing an attorney through an LPA, a business owner ensures that someone capable and trusted can step in and continue running the business smoothly, minimising disruptions and preserving its value.
| Protection of Interests
A Lasting Power of Attorney provides legal protection for the business owner’s interests. The appointed attorney has a fiduciary duty to act in the best interests of the business owner and the business itself. They are bound by law to act prudently, ethically, and within the scope of the powers granted. This safeguard helps prevent potential abuse or mismanagement of business affairs during the owner’s incapacity.
| Tailored Decision-Making
A business owner can customise their LPA to suit their specific needs. It allows them to define the scope of powers granted, set limitations, and specify preferences or instructions for decision-making. This flexibility ensures that the business owner’s intentions and values are respected and followed when important choices need to be made.
| Peace of Mind
By creating a Lasting Power of Attorney, business owners gain peace of mind knowing that their business and personal affairs will be managed by someone they trust. It eliminates uncertainty and provides a clear plan of action in case of incapacity. This peace of mind allows business owners to focus on their recovery or well-being, knowing that their business is in capable hands.
A Lasting Power of Attorney is an essential legal tool for business owners to plan for unforeseen circumstances. It ensures the smooth running of the business and protects the owner’s interests during periods of incapacity. By appointing a trusted attorney, business owners can secure their legacy, preserve business continuity, and enjoy peace of mind, knowing that their affairs are well-managed even when they are unable to do so themselves.
If you think you would benefit from a Lasting Power of Attorney, call us on 0800 988 7756 for a free initial discussion. Or book an appointment here. You can have your appointment in person in one of our offices, or by video call if that is more convenient.
