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  • Business Lasting Power of Attorney - If you don’t mind your own business, who will?
News 1
30
May
Business Lasting Power of Attorney - If you don’t mind your own business, who will?
News

Many business and self employed people are very good at running businesses and protecting their future by building a good reputation. However, very few consider what will happen to their business, if they were to lose their mental capacity. We assume that this is a subject that we only need to consider when we get older, but this is a mistake.

If a Director, Partner or Sole Trader should lose their mental capacity, who will run the business? Equally, what if the Director, Partner or Sole Trader is out of the country for a period of time but needs to delegate the running of the business to a nominated person? Without the appropriate provisions being in place a business may be unable to pay wages or settle supplier invoices, as business accounts may not be accessible. Similarly, new contracts may not be able to be signed. This can have serious consequences for the reputation of the business and its profitability.

A Business Lasting Power of Attorney which relates to business property and finances can be used to appoint an Attorney who is authorised to deal with all your business affairs. Your Attorney, or Attorneys, as you can appoint more than one, will then have the power to deal with the business accounts, service loans/mortgages, invest assets, sign new contracts and also deal with HMRC in regard to tax returns. This can be on a permanent or temporary basis if the Director, Partner or Sole Trader is out of the country, for example, or if they are just unable to deal with such matters for whatever reason (such as incapacity).

As a Sole Trader, if capacity becomes an issue, whether mental or physical,who would deal with your business in the interim period in order to protect its reputation and profitability? Likewise if you are in a Partnership, whilst you may have a Partnership Agreement, does it deal with the situation if you became unable to manage your affairs? Partnership Agreements should be checked and this issue should be discussed between Partners so that the Agreement can either be amended, or each Partner puts into place a Lasting Power of Attorney which appoints an Attorney who will step into their shoes in the event of loss of capacity. If you are a Sole Director or part of a small private company, any Articles of Association are unlikely to be of any use if you lose your mental capacity. If you are one of several Directors, the Articles of Association need to be checked and if they do not deal with this situation, then they need to be re-considered to protect all interested parties.

It is possible to undertake more than one Lasting Power of Attorney, to enable you to appoint an Attorney to deal with your personal property and financial affairs and a different Attorney to deal with your business property and financial affairs. Alternatively, if you want to use the same Attorney for both personal and business affairs thenone Lasting Power of Attorney can be used.

Legal advice should be taken before you undertake any action, to ensure that you are fully aware of the legal consequences of what you are proposing and to ensure that you do not undo any of the general powers given in the Lasting Power of Attorney itself. If you don’t mind your own business, who will?

Contact Us

Please contact Louise Wilson or the Private Client Department if you would like further advice.

Please read Reliance on information posted in our Terms of Website Use - see Legal section - before relying on this commentary.

Before relying on this commentary please read the Reliance on information posted section in our Terms of Website Use in our Legal section. Please note that specialist advice should be taken in relation to any specific queries and the information above is provided for general information purposes only.

Authors

Louise Wilson

Partner
Wills, Tax & Estate Administration
upper shape

Our Experts

Lesley Rushton

Head of Department
Wills, Tax & Estate Administration and Court of Protection

Charlotte Nock

Partner
Wills, Tax & Estate Administration

Chris Neeve

Partner
Wills, Tax & Estate Administration

Louise Wilson

Partner
Wills, Tax & Estate Administration

Ovid Busette

Senior Associate Solicitor
Wills, Tax & Estate Administration

Rachel Mock

Associate Solicitor
Wills, Tax & Estate Administration

Poppy Cooke

Assistant Solicitor
Wills, Tax & Estate Administration

Dee Delo

Court of Protection Manager
Court of Protection

Joanne Beale

Tax Manager
Trusts & Taxation

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