A Business LPA or Commercial LPA is an important legal document in which you (the donor) appoint people you trust (known as attorneys) to be able to make decision for you regarding your business in the event that you could not make them for yourself, for example if you lost mental capacity.
In this short article we are going to explore how the business LPA works, and when they might be needed.
As a business owner, you are the one in control of your business – you make the decisions. But what happens if something happens to you and suddenly you can’t make those decisions anymore? This is where a Business LPA comes in.
A Business LPA is a legal document that appoints someone else (known as an attorney) to make decisions on your behalf about your business, if you can’t make them yourself. This could be because you have lost mental capacity, or for some other reason.
It is important to appoint someone you trust to be your attorney, they will have a lot of responsibility. You can appoint more than one attorney, and you can decide how they will make decisions (jointly or jointly and severally).
You can give your attorney(s) as much or as little power as you like, for example you might want them to be able to make decisions about financial matters, or you might want them to be able to make all decisions about the running of your business.
It is important to note that a Business LPA is only effective from the point at which you lose mental capacity, so it is important to put one in place as soon as possible.
If you would like to find out more about Business LPAs or how they work, please get in touch with our team of experts who will be happy to help.
As the business owner, you get to decide what sort of authority you want to grant your attorney (or attorneys). You can give them broad powers to make most decisions on your behalf, or limit their authority to more narrow financial matters. No matter what you choose, it’s important that you communicate your wishes clearly in the LPA document.
Additionally, you’ll need to designate whether you want your attorneys to make decisions jointly or severally. If you choose joint decision making, then all of the attorneys will need to agree on every business decision. However, if you opt for joint and several decision making, then each attorney can act independently without consulting the others.
If you would like to discuss your business succession or to get an LPA in place, speak to us. Remember – succession planning for your business is a business expense.