What is a Business Lasting Power of Attorney (LPA)? Solicitor Jemma Pyne, in Reading law firm Blandy & Blandy LLP’s top-tier probate, tax & trusts team, explains why a business Lasting Power of Attorney (LPA) can be an important and useful legal document.
What is an LPA?
A Lasting Power of Attorney (LPA) is a legal document that allows those nominated as attorneys to make decisions on the person’s (donor’s) behalf. LPAs came into force in October 2007, replacing Enduring Powers of Attorney.
If you have made an Enduring Power of Attorney (EPA) before October 2007, it is still valid but only in relation to property and financial affairs.
Types of LPA
The LPA must be registered by the Office of the Public Guardian whilst the Donor still has mental capacity, to take effect. You may wish to consider:
- Personal LPA – Property and Financial Affairs
- Personal LPA – Health and Welfare
- Business LPA
The same document and process is followed for both a personal financial LPA and a business LPA. Each type of LPA can be tailored to meet your specific needs and requirements.
A person can have both a personal financial LPA and a business LPA, but should appoint attorneys that are suitable for each one separately.
A business attorney must be able to carry out the role of the donor in a business LPA, and donor should consider giving specific and detailed instructions on what powers a business attorney would hold.
Why have a business LPA?
A business LPA can be used if a business owner:
- is abroad on holiday or for business
- has had an accident that means they are no longer capable of acting
- has an incapacitating medical condition that means they are no longer capable of acting
A business LPA is suitable for:
- a sole trader as they are not a separate legal entity to their business
- a person who is self-employed as they are not a separate legal entity to their business
- a director of a company if a director’s incapacitation is not covered by the Articles of Association or Memorandum of Association
- a partner within a partnership if a partner’s incapacitation is not covered by the articles of association or memorandum of association
Blandy & Blandy LLP can advise on whether your articles of association or partnership agreement cover incapacity.