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Business Lasting Powers of Attorney
Within your business plan, do you know what would happen if you, your business partner or fellow directors were suddenly no longer able to make decisions for yourselves?
Ill health and lack of capacity is something that none of us plan for, but when owning a business, it is crucial that it is considered and plans are put into place to ensure the business can continue running.
The wellbeing of your business affects not only you but has direct financial consequences for your family, other stakeholders in the business and your staff, suppliers and customers.
A Business Lasting Power of Attorney is a critically important document to ensure the smooth running of your business should anything happen to you, a business partner or co-director.
If nobody has the legal power to act on behalf of the business, should you be unable, there is a very real risk that bank accounts will be frozen which will affect your ability to pay bills and salaries of those working for you. Unpaid bills could then even result in insolvency proceedings.
Partnerships are particularly vulnerable. The incapacity of one partner could lead to the bank freezing the partnership account, even if the remaining partners are fine.
Family and Private Companies are also at risk when directors who are often major shareholders lose the capacity to fulfil their role and obligations.
A Business Lasting Power of Attorney has a number of advantages:
- Helps with the creation of a contingency plan so it is clear to everyone what will happen if owners or partners or stakeholders lose the capacity to make decisions.
- The business can keep running while longer term arrangements are put in place.
- Families and loved ones are spared the additional distress of having to deal with a crisis in the business alongside what may also be a personal crisis.
- If you have an existing Lasting Power of Attorney for your personal affairs, the person nominated, whilst eminently suitable for that task, may lack the relevant skills and abilities to act in a business capacity, whereas a Business Lasting Power of Attorney will specifically address this.
A Business Lasting Power of Attorney is a straightforward solution to provide peace of mind should circumstances change in the future.