When you first set up your business, you’ll have a lot of things on your mind. What branding should you go with, registering your new address on Google, etc. However, many businesses forget to protect their assets.
If you’re a sole trader or a partner in a private firm, you may need to check whether you have a Lasting Power of Attorney. The last thing you think of when setting up your business is what would happen if you become unable to run your business. Although many company owners take out a Key Person Insurance Policy, they can often forget about an LPA.
We know that you business owners are busy people, being in charge of an organisation takes up a lot of time. But what if you had no option but to take time off, due to illness or injury? What if you were enjoying yourself on holiday and your plane gets cancelled? Who would take over the day to day running of your company?
You may think the answer is obvious, the next highest person in the business, right? Well actually, there is no automatic right to deal with another person’s affairs, unless you have hired a lawyer, the disruption your business could face could be chaotic.
A spiral of problems can occur in these situations; no one would have access to your bank accounts. Therefore, staff and suppliers wouldn’t get paid; this means potential clients could be lost, and your employees may face hard times due to a lack of wages.
Any business, no matter how small, is important to the UK economy, so there are ways to protect yourself in any of the situations above by implementing a business continuity plan. Many of these plans include a commercial Lasting Power of Attorney.
When you have an LPA in place, you can choose who you’d like to handle your business affairs, should you become incapacitated. An LPA isn’t just restricted to your business affairs; you can also use them for personal matters.
If you’ve chosen to have your LPA only for business, you should appoint someone who you trust, but is also familiar with the company. If you’re in business with a partner, it makes sense to select each other as attorneys.
You don’t just have to choose one LPA; you could choose someone in the business who you trust alongside a family member. A business associate could be appointed to decide on business contracts, but not able to access bank accounts without the validation of the second attorney.
Before you select your attorney, you may want to know what they will be able to do on your behalf. They’ll be able to buy and sell any property, organise insurance and property repairs, invest your assets, access your bank statements, open and close any bank accounts and deal with your tax affairs.
No matter how much you hope, you will never need a Lasting Power of Attorney, it’s not worth taking the chance. Adding an LPA to your business is a small price to pay for the continuing of a successful business that you’ve worked hard to build.