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Our Guide to Lasting Powers of Attorney for Your Business Interests
Key Terms
- Lasting Powers of Attorney (‘LPAs’) are formal legal documents which allow you to appoint attorneys to make decisions for you in the event that you are unable to do so for yourself in the future. An LPA is a safeguard which gives you peace of mind that should you in the future, lack mental capacity or are physically unwell then you will have attorneys appointed to deal with your affairs on your behalf.
- Property and Financial LPAs (‘General LPAs’) deal specifically with decisions regarding your assets and financial circumstances.
- Health and Welfare LPAs (‘Health LPAs’) deal only with questions regarding your healthcare and wellbeing.
- Business LPAs are a type of Financial LPA that deal specifically with the assets and financial considerations relating to your business interests. A standard Financial LPA will appoint attorneys who will make decisions about your personal finances and assets and is better suited to your private affairs. A Business LPA will appoint one or two ‘Business Guardians’ who will oversee the running of the business, but will delegate the day-to-day running to other people who will be better placed to carry out those specific functions.
- “Attorneys” are referred to as “Guardians” for the purposes of this Guide.
Why do I need a Business LPA?
If you are a company director, partner or sole trader, then you will have invested a lot of time, money and effort into your business. Have you considered protecting your interests in the event that you are not able to make decisions?
Despite the stereotype that people who lose capacity are elderly and retired, this is not always the case. Nearly 18% of working age people will have mental health problems which affect their ability to make decisions*. Furthermore, incapacity is not only caused by mental illness, but could be caused by physical injury or if you are merely out of the country and not contactable.
If Dementia and/or Alzheimer’s are prevalent in your family then you arguably have an obligation to your business partners and shareholders of your company to make a Business LPA as you owe them a duty of care.
If any of these situations are to occur to you, unless you have appointed a Business Guardian to deal with finances, the cost and disruption to your business could be enormous. For example, the business’ bank account could be frozen which would result in staff, suppliers and loans not being paid. Furthermore, the ability to enter into future contracts will be lost. If you have given a personal guarantee alongside any business loans and the business’ bank account is frozen, your personal assets could be at risk.
Who should I choose as my Business Guardian?
If you did want to appoint a Business Guardian, they should be trustworthy and understand the particular workings and dynamics of your business and how you would like it to be run.
You may wish to appoint more than one Business Guardian to act alongside each other. For example, you may wish for a business partner to work alongside a member of your family. This would ensure that any decisions are scrutinised by a second person. The Business LPA is flexible and can specify whether the Business Guardians must take decisions jointly, whether they can take them independently, or a mixture of both. This enables you to decide how your business can be run in the event that you are not able to.
If you would like, Business LPAs can be used as soon as they are registered with the Office of the Public Guardian and can also be revoked if you retire or sell your business (provided that you still have the capacity to revoke it). Alternatively, the Business LPA can specify that it can only be used if you lose mental capacity (instead of physical capacity).
Why not just let the Court of Protection deal with things?
If you have not put in place a Business LPA (or indeed a General or Health LPA) and lose capacity, then a Deputy will need to be appointed by the Court of Protection, which can take several months to arrange and can also be a costly exercise. During this time, there is a risk that your business may not be able to continue without someone making decisions. Furthermore, you will not have any say in who the Deputy is and how they run your business.
How can we help?
Each business is different. We will take into account the particular considerations of your business and draft a Business LPA which will seek to ensure that if anything does happen to you your business interests will be well looked after.
With recent proposals to grant LPAs online which present an increased risk of fraud, we maintain that the most effective way to draft a suitable Business LPA is through a face-to-face meeting whereby your instructions can be taken and the Business LPA can be tailored to your specific business.
We offer a competitive charging structure for LPAs and our charges include a complete service, certificate provider, registration and free storage in our strong-room for safe keeping and there are no hidden extras.
How are they made?
- We will meet with you and discuss the particular aspects and dynamics of your business. We will get to know you (unless we already do) and we will learn about your business.
- We will provide you with Questionnaires to complete as this will help us to help you!
- After our meeting and completion of the Questionnaire this will provide us with the information to enable us to draft a Business LPA that will suit your business’ needs.
- We will send you draft LPAs for you to consider, amend and for further discussion.
- We will also prepare a General LPA and Health LPA if you decide to compliment your Business LPA.
- We will arrange to see you for your LPA to be signed and witnessed. We will also act as the required Certificate Provider as the forms need verification of your knowledge and understanding of the LPA.
- We will liaise with your Attorneys/Guardians for execution of the documents.
- We will then deal with its registration at the Office of the Public Guardian.
If you would like to learn more and would like to draft any LPAs, whether a Business LPA, General LPA or Health LPA (or all three) please contact Mark Parnall on 01566 772375.
Costs Information
For a single standard Financial or Health LPA £495.00 plus VAT
For both standard Financial & Health LPAs £895.00 plus VAT
If a couple wish to do both types of LPA (four in total) £1595.00 plus VAT
Business LPAs are more complex than standard LPAs so we will require full details from you before we are able to provide a more accurate costs figure.
In addition you need to add on the court registration fee for each LPA of £82.00
* Adult psychiatric morbidity in England (2007), NHS Information Centre for health and social care, University of Leicester
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