When we think about planning for the future, most of us focus on things like retirement savings, health insurance, and making sure our families are taken care of. But there’s one crucial part of future planning that is often overlooked: preparing for the possibility that you might not be able to make important business decisions for yourself in the future. That’s where a Business Lasting Power of Attorney (LPA) comes in.
In this article, we’ll explore what a Business Lasting Power of Attorney is, why it’s important, and how it can be set up in just a few simple steps. By the end, you’ll understand why this small but powerful document can be your safeguard for the future.
What is a Business Lasting Power of Attorney?
A Business Lasting Power of Attorney (LPA) is a legal document that allows you to appoint someone (a trusted individual or a professional) to make decisions on your behalf in if you become unable to manage it yourself. Unlike the more common personal LPA, which is used for healthcare and personal matters, a business LPA specifically covers your business-related decisions.
Whether you run a small business or oversee a larger company, your ability to manage business decisions is vital. But what happens if you fall ill or become mentally incapacitated? A Business LPA ensures that someone you trust can step in and keep your business running smoothly, handling financial and operational matters as if they were you.
Why is a Lasting Power of Attorney for Business Crucial?
You may be wondering: Do I really need a Business LPA? The answer is yes. Here’s why:
Uncertainty is Part of Life: Accidents, sudden illnesses, or cognitive decline can happen to anyone, at any time. Having a Business LPA in place ensures that your business doesn’t come to a halt if you are unable to manage it temporarily or permanently.
Continuity of Business: Your business doesn’t stop if something happens to you. By appointing someone with a Business LPA, you ensure that your employees, clients, and customers will not face delays or uncertainty, keeping the operations smooth even during a crisis.
Make Financial Decisions: A Business LPA allows the appointed person to handle financial matters, such as paying bills, accessing company bank accounts, and signing contracts. Without this, your business might face financial disruptions.
Protecting Your Legacy: If you have a long-term vision for your business, a Business LPA ensures that your plans continue to be carried out, even if you can’t be there to oversee them. It’s one way to safeguard the legacy you’ve worked so hard to build.
Who Can You Appoint as Your Attorney?
When setting up a Business LPA, you need to choose an attorney or multiple attorneys who will act on your behalf. It’s important to select someone who you trust deeply and who understands your business. Here are a few options to consider:
A Trusted Family Member or Friend: This person should have your best interests at heart, but it’s important to choose someone who is also capable of handling business affairs.
A Professional: Many business owners appoint an accountant, solicitor, or business advisor as their attorney. These professionals are experienced in managing finances and business operations, which makes them a reliable choice.
Multiple Attorneys: If you prefer, you can appoint more than one person to act together or separately. This provides an additional layer of protection.
Make sure that the person you choose is reliable, trustworthy, and capable of handling the responsibilities that come with the position.
How to Establish a Lasting Power of Attorney for Your Business
Setting up a Business LPA is a straightforward process that can be done in just a few simple steps. Here’s how you can get started:
Decide Who Will Be Your Attorney: As discussed earlier, the first step is choosing someone who is capable of managing your business affairs. Take time to consider your options carefully.
Complete the LPA Form: To create a Business LPA, you’ll need to fill out the official form provided by the relevant legal body in your area. This form will ask for details about you, the business, and the appointed attorney(s).
Sign and Witness: Once the form is complete, you’ll need to sign it in front of a witness. The witness must be someone who isn’t involved in the document, ensuring that the signing is legitimate.
Register the LPA: Once signed, your Business LPA will need to be registered with the appropriate government agency. This step is crucial, as it gives the appointed attorney legal authority to act on your behalf. Registration might take a few weeks, so make sure to plan ahead.
Keep Copies Safe: After registration, it’s a good idea to keep several copies of the LPA in a safe place. You should also provide a copy to the person you’ve appointed, so they are aware of their role and responsibilities.
When Should You Use a Business Lasting Power of Attorney?
A Business LPA is activated when you are unable to make business decisions for yourself due to illness, injury, or mental incapacity. Until that time, you can continue managing your business as usual.
For example, if you are in a car accident and are unconscious for a period of time, your appointed attorney can step in and handle business decisions, allowing the company to continue operating without interruption. Similarly, if you experience a medical condition that affects your ability to make clear decisions, your attorney can take over temporarily until you are able to resume control.
The Advantages of a Lasting Power of Attorney for Business
A Business LPA provides peace of mind knowing that your business is in good hands, no matter what happens. Here are some of the key benefits:
Continuity: Your business can keep running smoothly, even if you’re temporarily incapacitated.
Financial Protection: Your financial matters will be managed by a trusted person, preventing potential financial loss or disruption.
Less Stress for Loved Ones: In difficult times, the last thing you want is to add confusion about your business to the mix. A Business LPA takes that burden off your family and colleagues.
Flexibility: You can choose multiple attorneys, set limits on their powers, or even specify how and when they can act on your behalf.
Conclusion
In the fast-paced world of business, it’s easy to overlook the need for a Business Lasting Power of Attorney. However, taking the time to set one up can secure your business’s future, ensuring that operations continue smoothly even if you’re unable to manage things yourself.
With just a few steps, you can prepare your business for any unforeseen circumstances, protecting both your livelihood and your legacy. Don’t wait for the unexpected to happen — secure your future today with a Business Lasting Power of Attorney.
