Date Published: 13/11/2020 15:39
Many of us may have Lasting Power of Attorneys set up for an elderly relative or even for ourselves. But if you are a director have you considered one for your business? Jillian Thomas considers the benefits.
An LPA is a document that allows you to appoint an attorney who will be able to make decisions and act for you if you were unable to make those decisions for yourself. Ordinarily there are two types of LPAs, a health and welfare document, and a property and financial affairs document.
But did you know you can also have one for your business? This will give power to attorneys to make decisions relating to the running of your business. You may choose to put this in place for a number of reasons, such as:
According to the Mental Health Discrimination Act 2013, a director or partner of a company who loses their mental capacity cannot automatically be removed as a director of ‘said’ company. It depends on what clauses are contained within their articles of association.
If a company has multiple directors and one loses capacity (and thus the ability to make decisions relating to the business) then it is understandable that the other directors or partners may wish to remove them from the business.
It may be the case though that there is only one director, or a business is running as a sole proprietorship. In this case if the director loses the ability to make decisions then the business can suffer as a result.
Having a commercial LPA in place can allow you to appoint powers for someone to make decisions when necessary. But to be able to implement this the company articles and any partnership agreements must reflect this as an option.
When appointing an Attorney to act on your behalf for a business, you should ensure that you appoint someone who understands the business, its goals, way of trading and how it runs day to day.
There is a lot to consider when considering commercial LPAs and it is advisable to consider seeking professional advice. Please contact us if you think we can help on 01246 435996.
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