Does my Lasting Power of Attorney mean my wife can step in and run my business if I’m not up to it?
The simple answer to this is yes, your Lasting Power of Attorney (LPA) could allow your wife to run your business if you were unable to do so, but there are a number of factors you should consider, and it might be the best course of action for you to take out a specific LPA to safeguard your business interests, separate from your LPA for your personal matters.
Is your wife currently involved in the running of the business? Would she require the help of other colleagues within the business to keep the business operating smoothly? If so, you may want to consider appointing them as your attorneys to act alongside your wife, or instead of your wife. It is important to consider what would be in the best interests of your business in deciding who to appoint as your attorney(s).
How a Business LPA can help
Business continuity is an important concern for many businesses. Ensuring that a business continues to run smoothly if the owner becomes unable to manage things, through mental or physical incapacity, or through absence or a change in personal circumstances, simply makes good commercial sense.
So, if you’re a sole trader, partner in a partnership, a company director or shareholder with voting rights in a company, it is well worth considering putting a specific Business LPA in place to cover your business dealings. Without this important safeguard, your business might face real practical problems if you were unable or unavailable to carry out your duties. Transactions might stall, employees go unpaid and trading might come to a standstill because no one but you can act on these matters.
Writing a Business LPA gives the person or people you nominate as your attorney(s) the necessary legal status to run your business affairs on your behalf. In addition, you can choose the roles you want your attorney(s) to fulfil. For example, you could appoint one person to act independently on some aspect of your business, but jointly with others on, say, financial matters. It is important that legal advice is taken on these issues, and on how the Business LPA should be drafted to ensure that the document will be valid and workable.
If you’re thinking about creating an LPA for business use, it’s also important to review the articles of association or partnership agreements as these may have clauses relating to the incapacity of directors or partners, and the LPA shouldn’t conflict with these provisions.