When you are running your own business you are the central cog in the machine. It is very rewarding (if sometimes challenging) and you have the immense satisfaction of ‘doing your own thing’ and seeing your own efforts reap rewards.
It comes with its own risks too, however. Have you, for example, given any though about what would happen to your business if you weren’t fit and well enough to run it?
This Is where putting in place a Lasting Power of Attorney which makes provision for your business affairs is really important.
Lasting Power of Attorney – the basics
A Lasting Power of Attorney (LPA) gives people you trust the power to act on your behalf if you are unable to do so yourself (your Attorneys). They can make decisions for you should you have an accident, illness or loss of mental or physical capacity. The LPA can only be put in place while you have the mental capacity to do so (once you are incapacitated, it will be too late).
For your own protection, an LPA cannot be used until it is registered with the Office of the Public Guardian.
There are two different types of LPA: Health and Welfare which allows your Attorneys to make decisions on personal matters such as care and medical treatment, and Property and Financial which gives them the ability to make decisions on, for example, paying bills and making financial decisions.
Considerations for your business in your LPA
It may be, of course, that you have a business partner or co-directors and there are provisions in you’re articles of association which outline what happens in such circumstances. If you are a sole trader or director-only company, or if you hadn’t previously considered this eventuality, you need to make other arrangements.
With a Property and Financial LPA you can set out in the LPA which of your attorneys has the power to act in different aspects of your affairs. This is of particular importance if you are a business owner.
For example, suppose you run a Graphic Design Agency with a small team. You might, quite reasonably, ask your partner to be your Attorney. If, however, your spouse or partner is an airline pilot who flies long-haul, they may have neither the skills or the time to make sure your business can continue on your behalf. It may be more appropriate to appoint a fellow business owner, perhaps with the support of your accountant, who knows your clients and can reschedule work.
An LPA is not just for later life either. It protects you for any eventuality. If, for example, you are in a car crash and unable to work for eight weeks what impact would that have on your business. Would it still be ticking over? Would your staff and suppliers get paid? Would anyone notify your clients that orders may be delayed?
Making it easy for your Attorneys to act
Once you have your LPA in place and it has been registered with the Office of the Public Guardian, it is worth making sure your appointed Attorneys for the business have everything they need. This may mean documenting processes and making sure you have made adequate provision for accessing the finances of the business. You might also want to think about keeping records of where certain projects are up to.
It is worth it though. Having Attorneys in place for your business will make sure you have a business to come back to.
Book Your Free LPA Consultation
To learn more, book a free call with one of our experts to see how we can help you protect your business.
From our Cambridge office, in your own home or online, we’re ready to help you in the way that is best for you.