Many of us have business interests, whether as:
- Directors and shareholders of limited companies;
- Partners of partnerships;
- Members of limited liability partnerships; or
- Sole traders.
In each case business owners rely significantly on them for their income. And those working for, or with, us rely just as heavily on their employer’s health and continued operation.
Changes in the law brought about by the Equalities Act 2010 now make it unlawful to remove a director/partner from their role on the ground that they have lost capacity through accident or illness. This raises very serious concerns for business owners.
Moreover, a director or partner does not have to suffer a serious accident, become depressed or suffer a stroke to incapacitate themselves; a missed plane or other travel difficulties could prevent them from being physically capable of performing a task on behalf of the company or partnership in a timely manner that could lead to serious disruption or financial loss.
To protect your interests, and those of your business, you should consider making a Business LPA.
It is theoretically possible to have just one LPA appointing the same attorneys to manage your personal assets and your business assets. However, it may not be appropriate for the same person to make both personal and business decisions, due to a potential conflict of interests or because they are not appropriately qualified.
You could consider making one LPA appointing certain attorneys to manage your personal assets, and others to manage your business assets. But bear in mind that this could create confusion regarding the scope of the attorneys’ powers, and the Office of the Public Guardian might then reject the LPA.
Fortunately, it is possible to make more than one LPA, and so business owners can keep their business affairs separate from their personal affairs. Each LPA should be drafted professionally so as to separate effectively their scope and jurisdiction.
We have partnered with a leading law firm to offer a holistic business legacy planning service, examining your business’s founding documents to assess areas of risk, advising on capacity and legacy matters, and putting in place documents such as Business LPAs, cross option agreements and shareholder/partnership agreements to secure your business against interruption due to incapacity or death. Please call us for further details.