Business Lasting Powers of Attorney
What if, as a business owner, you lost mental capacity? At TLB Planning Ltd, we feel that Business Lasting Powers of Attorney (LPAs) are as important as business insurance – if not more important.
If the business owner loses mental capacity through accident or illness, bank accounts will be frozen and no-one has the authority to make any payments, thereby causing financial hardship to both business and employees.
An application would need to be made through the Court of Protection, which is an expensive and time-consuming process, costing thousands of pounds and taking around nine to twelve months. During this time, the business is exposed to massive risk.
When setting up business LPAs, the same process is followed as for personal ones. Business owners need to consider carefully who would run the business should they become incapacitated both in the short term or permanently. They need to appoint an Attorney that is competent, trustworthy and capable of taking business decisions, running the business efficiently in their absence.
Once a business LPA has been put in place, it does not affect the business owner’s rights to manage their business as they see fit; however should the business owner wish to travel abroad or need to work overseas, the LPA can be used whilst that person still has capacity but is out of the country.
Business LPAs should be used within the business continuity plan and all business owners should have LPAs in place to protect their business and family finances.
Get advice from our professionally qualified estate planners on business LPAs.
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If the business owner lost capacity, the business could not be sold, bills or wages could not be paid, thereby causing great financial stress for family members.
If one of the bank account signatories (often the owner) loses capacity, the bank accounts will be frozen. Banks don’t do this to be difficult, they do it as they have a duty of care to protect the vulnerable person;