Power Of Attorney For Business Owners

What is power of attorney?

A lasting power of attorney is a legal document that business owners should have in place. This document is essential, particularly for sole traders or self-employed individuals with no other business partners, as it states what would happen to the business in the event of the business owner being incapacitated. A power of attorney is a selected third party who is trusted to make decisions on behalf of the owner.  

Utilising a power of attorney

If a business owner becomes sick, passes away or is abroad and not contactable, a lasting power of attorney is a legally agreed person who can make decisions on the business owner’s behalf.

A lasting power of attorney must, therefore, be a person who is trusted by the business owner to make decisions that benefit the business and can continue its growth during the owner’s absence or in the event of their death. This lasting power of attorney should be chosen, and the paperwork completed, whilst the business owner is fully capable of comprehending the purpose and effect of the document.

Consequences of not having a lasting power of attorney

If a business owner becomes unable to make business decisions but does not have a lasting power of attorney in place there can be disastrous consequences for the company.

The business may need to apply to the Court of Protection for a deputy, someone who can be placed in charge and able to access bank accounts. However, this process is very time consuming and can take months. In that time, bank accounts could be frozen, leaving the business unable to pay staff, suppliers, or tax. Thus, resulting in the business not surviving the death or incapacitation of their owner.

Lasting power of attorney makes business sense

Appointing a lasting power of attorney is protecting the future of the business. Even if a business owner is young and in good health, having a backup plan in case of an unexpected and unwelcome event can be the difference between the business the owner has worked hard to build surviving or failing. The cost of sourcing a deputy is not only time consuming but also costly. The cost of appointing a lasting power of attorney is relatively inexpensive, especially for the potential savings it could generate.

Lasting power of attorney experts

No power of attorney document is the same because every business is different. It is a bespoke document, created for the business, the business owner, and the power of attorney and each party’s needs. Each business owner will want their business left and managed in a particular way. Speaking to an expert can help business owners figure out what their plan would be, should they become unable to make decisions themselves.

The experts at Active work with clients every day to source the right lasting power of attorney documents to suit their business and their personal needs. Having a lasting power of attorney is all part of a continuity plan that a business owner should be planning for: let Active make it happen for you. Booking a consultation is easy…

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