A business lasting power of attorney (BLPA) allows an individual to appoint an attorney to make decisions concerning their business interests when they are unavailable or lack mental capacity. They are widely used within businesses to manage a range of commercial situations.
As a business, if you do not have a BLPA in place, it may be a massive risk and in some cases can affect insurance costs and future claims.
Why make a BLPA?
If an individual loses capacity and has not executed a valid enduring or lasting power of attorney, an application to the Court of Protection to seek the appointment of a deputy may be required. This process can take around 6 to 7 months and during this time there would be no one who could lawfully make financial decisions on the individual’s behalf.
This may mean a company cannot pay their staff, complete transactions or enter into new contracts and this could significantly impede the day-to-day running of the business.
What can a BLPA do?
Attorneys are able to deal with property owned or leased by the business, organise insurance, access bank statements and accounts, invest assets, deal with tax affairs of the business, pay staff and suppliers and also sign contracts on an individuals behalf.
If you are a business owner, it is important to consider what would happen to your business if you were unable to make decisions. This may not only be the case if you were to have a medical condition that incapacitated you, but also if you went on holiday for a longer period of time, or were to have an accident.
Creating a business LPA
In order to create a BLPA you must have mental capacity and demonstrate the intention to create the BLPA. This means that you will have to understand the following points:
● The purpose of making the BLPA at the time
● The consequences flowing from creating the BLPA; and
● The consequences of your choice of attorney(s).
Choosing an attorney
It is very important that the attorney is familiar with the business concerned and is someone who you trust with your business affairs.
Where an individual chooses to appoint more than one attorney, they will need to decide whether they are to act jointly or jointly and severally.
The chosen attorney must be over the age of 18 and be financially solvent.
For more information regarding Business Lasting Powers of Attorney please contact our employment solicitors.