All businesses protect their buildings and assets with insurance in the event that the worst should happen, but very often, no consideration is given to what would happen to the business if a key decision maker was suddenly not around. Without anyone appointed to take over the running of the business, even if only temporarily through illness, important deadlines and decisions may be delayed or even missed, putting the future of the business at risk.
A Lasting Power of Attorney (or LPA) allows the person (the donor), to appoint an attorney who will be able to make decisions and act for them if they were unable to make those decisions for them self. A Business LPA works in the same way, but for the business. It can be used either temporarily if a business owner is on holiday or away for business, or permanently due to an accident or an illness meaning that they are no longer capable of acting.
Ordinarily there are two types of LPA’s for individuals, a health and welfare document and a property and financial affairs document. There is also however, an additional document giving attorneys power to make decisions relating to the running of a business. A person can have both a personal and financial LPA as well as a Business LPA, but they should appoint attorneys that are suitable for each one separately as the roles are very different. A business attorney must be able to carry out the role of the donor in a Business LPA, and the donor should consider giving specific and detailed instructions on what powers their business attorney would hold.