If you are a sole trader successfully running your own business, it’s unlikely that you often think about what would happen if you became incapable of running your business or making important day to day decisions. In many cases, you will be the sole person able to sign cheques, authorise the payment of wages and place orders. If you were to have an accident would your business survive without you?
A Lasting Power of Attorney (LPA) is a legal document which allows you to appoint a person or people you trust you look after your affairs should you ever be incapable, either physically or mentally, of doing so for yourself. A Lasting Power of Attorney is usually put in place to cover your personal affairs, but it can also be extended to include your business affairs too.
If you have Lasting Power of Attorney in place your chosen attorney(s) can be given powers that could help your business to continue to operate in unforeseen circumstances.
If you became incapacitated and you did not have a Lasting Power of Attorney in place, an application would have to be made to the Court of Protection for someone to deal with your affairs. This process can take up to six months, and ultimately, the person appointed may not be the person you would have chosen. In the meantime your business may not be able to survive.
Depending on your business structure, for example if you are a shareholder in a limited company or a partner in a partnership, there may be other ways in which you can protect against these kinds of risks. Our team of commercial law solicitors will be able to advise you on this in more detail.