Business Protection – Using A Business LPA

A Business LPA is similar to a personal Lasting Power of Attorney, in that you appoint an ‘attorney’ to act on your behalf, this attorney will be able to make important business decisions when you are unable to.

One of the first things you do when you start a business is to take out business protection. This is often insurance such as employers liability or building and contents. These are great to ensure that your business is protected but have you considered what would happen if you were incapable of making important running decisions of your business on a daily basis? That’s where a business LPA comes in.

Who Can Be An Attorney?

With a business LPA it is advisable to choose someone who is capable of running your business rather than just choosing a family member or friend. If you have a business partner this may be your first choice.

What Will An Attorney Do?

In most cases, your chosen attorney will have the power to

-     Buy and sell property (such as your office space)

-     Manage your bank accounts

-     Organise insurances

-     Make investments

-     Pay invoices

-     Pay staff wages

-     Order supplies

Why Is Having A Business LPA Important?

It is important to ensure your business can run safely and financially well if you are unable to provide the day to day operations. Since the Mental Health Discrimination Act 2013, it is harder to be removed as a Director due to a loss of mental capacity. It is important that at the start of a business, provisions are provided before the need arises.

If you are a sole trader and you are unable to run your business this means you will lose your business completely. This is where it would be important to have someone appointed to take over for you even if it means winding up the business or putting it up for sale.

Having a business LPA should be treated as another form of insurance. It will ensure that if you have to take time away from your business, there will be a business for you to come back to. An additional benefit of having a Business LPA is that it will be classed as a company document and therefore the company should be able to meet the costs.