One of the most exciting things about being a business owner is seeing your ideas come to life. You get to use your mind every single day to solve, create, challenge, and inspire. And it’s truly invigorating. But it’s also something many of us take for granted.
Have you ever considered what would happen if, one day, your mind deserts you? Or if you were mentally incapacitated by illness or accident? What would happen to your business then?
Who will step up and authorise payments; deal with suppliers; sign cheques; or pay your staff? You might assume it’ll be a colleague or a family member, but that would be a risky assumption to make.
You need something more concrete in place to protect your business.
You need a Business Lasting Power of Attorney (LPA).
What is a Business LPA?
A Business LPA is a legal document which allows you (while you have mental capacity) to nominate a trusted individual to look after your affairs if the worst should happen.
It can also be the difference between your business surviving and continuing, or collapsing in on itself should you lose capacity.
Without it, you’re essentially leaving your business and personal affairs in the hands of the courts – a long and expensive process, and one that could outlast your business and leave your staff and loved ones without a source of income.
Why do I need one?
For most businesses, the Mental Health Discrimination Act 2013 looms large. The Act dictates that if a director or partner loses mental capacity, they cannot be removed from their position (unless outlined in the company’s Articles of Association).
For companies and partnerships, this is clearly complicated. For sole traders, it’s nothing short of disastrous. If a sole trader loses mental capacity, their business will almost certainly have to close as there will not be anyone with the authority to step in and run it.
So, no matter if you’re a company director or a sole trader, you have a duty of care when it comes to your business and its staff, shareholders and key stakeholders. That’s why you need a LPA.
The benefits of arranging a Business LPA while you’re still healthy means:
- You can choose who you wish to manage your business should you become temporarily or permanently incapacitated.
- Your staff and stakeholders have peace of mind that the business will continue in your absence.
- Your loved ones have peace of mind that your business affairs are in order.
You never know when illness or accident will strike, so it’s crucial that you’re prepared. A Business LPA helps you cover all the bases as you recover.
If you’d like to discuss arranging a Business LPA, we can help.
Contact us today to speak with one of our friendly team members.