Business Lasting Power of Attorneys

What is a business Lasting Power?

A business Lasting Power of Attorney allows the donor to appoint an attorney to make decisions concerning their business interests when they are unavailable or unable to carry out their duties or a lack mental capacity.

Donors may create multiple Lasting Powers of Attorney (LPA) such as one for personal and one for business.  The choice depends on the donor and the donor's interests and liabilities.

Creating multiple LPAs introduces the concept that the donor has an intention to protect the business.   The donor creating multiple LPAs needs to demonstrate that they understand the nature and consequences of each specific LPA

Business Attorneys

The type of attorneys you choose for your business LPA is very important even more so than the attorneys you choose for your personal LPA.  Business attorneys must be in a knowledgeable position to make business decisions on your behalf no matter how complicated or simple the decision they face.

Why have a business LPA?

It is considered good practice to have a business LPA in place.  If the business owner, one of the partners or directors are unavailable, or due to a lack of mental capacity:

  • The bank is more likely to freeze a business bank account, even if there are other signatories.

  • Contracts may not be valid, declared void or unenforceable.

  • There can be regulatory breaches affecting other partners or directors.

  • There can be crisis management implications for the whole business.

  • It may also affect the business’s insurance.

Alternatively, you can make a Business LPA to have peace of mind.

Types of businesses that need an LPA

  • Sole traders

  • Partnerships

  • Limited partnerships

  • Limited liability partnership (LLP)

  • Companies