If you own a business what would happen if you lost mental capacity and were unable to make decisions?
By planning ahead, a Business Lasting Power of Attorney (BLPA) allows an individual to appoint an attorney to make decisions concerning their business interests either when they are unavailable or cannot make decisions due to ill health.
Suzanne Porter, director at Wake Smith Solicitors, looks at the reasons to put a BLPA in place.
“Business individuals could be sole traders, partners (general partnerships and limited partnerships) or partners (Limited Liability Partnerships) and company directors.
“A BLPA ensures the business owner has someone they trust and who understands their particular business in place and who will then be able to carry out the day to day running of the business.
“A business may be at risk if it does not have in place a BLPA as part of its crisis management strategy.
“And having one in place may also reduce insurance costs and future claims.
“It is far less expensive than having to apply to the Court of Protection for a Deputyship Order and can prevent bank accounts being frozen.
“Even where bank accounts are jointly held in the name of the business partners or directors the bank may choose to freeze the account if a partner or director loses capacity.”
So what roles and responsibilities do attorneys have?
They can:
- Deal with property owned or leased by the business
- Organise insurance
- Access bank statements and accounts
- Invest assets
- Deal with the tax affairs of the business
- Pay staff and suppliers and
- Sign contracts
Suzanne added: “In many instances, it will not be appropriate for the same person to make both personal financial decisions and business decisions on behalf of the donor.
“Commercial legislation and practices, financial regulatory bodies, conflicts of interest, the partnership agreement or articles of association may prevent such an appointment.
“Where this is the case, it is important to obtain advice from an expert.”
For further enquiries please contact Suzanne Porter, Director at Wake Smith Solicitors at [email protected] or call 0114 224 2178.
