Ensuring business continuity should be a key focus for directors, shareholders, and owners, however, business Lasting Powers of Attorney are often not considered as part of this future planning - but they should be.
The circumstances in which a business Lasting Power of Attorney may be needed are more common than people anticipate. It is not just in circumstances of old age or dementia in which an LPA could be needed. Comments such as "the other owners will figure it out" or "I'm too young to worry about these things" can leave businesses in tricky and potentially catastrophic situations.
Although the Court of Protection can provide a way out where business Lasting Powers of Attorney are not in place, it is neither a quick nor cost-effective tool and therefore directors, shareholders, and business owners should ensure that business Lasting Powers of Attorney form a key part of the business's continuity plan.
Where business owners, directors or shareholders have no LPA in place and mental incapacity occurs, business partners/family members can make an application to the Court of Protection for the appointment of a deputy to act on the individual’s behalf. However the process can be expensive and more importantly time consuming. It can take several months, for example, before a deputy is appointed, during which time the business may be vulnerable, at risk or at worst, collapse. Those running businesses or with shareholder or partnership responsibilities should therefore consider the merits of LPAs carefully. “I won’t need”, “I’ll get round to it at some point” or “the other owners will figure things out” are phrases we hear a lot. LPAs offer extra protection and can help minimise business risk.