If you are a sole trader who runs a small business it is vital that you understand what could happen if you don't put a Lasting Power of Attorney (LPA) in place. While a Lasting Power of Attorney is not a requirement to run your business, it will help if you are unable to manage your business because of a serious illness or accident.
A Lasting Power of Attorney is a legal document that gives protection if you lose capacity to make decisions. Without a Lasting Power of Attorney in place, the risks to your business could be:
- non-payment of wages to staff
- non-payment of invoices, particularly if bills were paid by cheque
- no access to bank accounts
- no access to business information for HMRC or your accountant
By putting a Lasting Power of Attorney in place you can give your business the protection it needs.
What Do I Need to Consider?
You'll need to think about who you want to appoint to make decisions on your behalf, this person is called your 'Attorney'.
Your Attorney should be someone you trust completely and who knows you well. You should feel comfortable with them making decisions for you and in respect of your business.
You should also consider whether you wish to appoint replacement Attorneys in case the first appointed Attorney is unable to act for any reason.
If you decide to appoint two or more Attorneys then you'll need to decide how they should act for example, whether they need to make decisions together or independently of each other.
You can also include guidance to your Attorneys about how you would like them to act and if appropriate you can choose to restrict the powers that the Attorney has over your affairs.
Which Lasting Power of Attorney Should I Make?
There are two types of Lasting Power of Attorney. One is for Property and Financial Affairs and the other is for Health and Welfare.
If you are putting a Lasting Power of Attorney in place purely to protect your business, then you will need to use the Property and Financial Affairs Lasting Power of Attorney. This is the Lasting Power of Attorney that will allow your Attorney legal access to the bank accounts in your name and lets them deal with the financial aspects of your sole trader business.
What Happens if I Don't Have a LPA?
You can only put a Lasting Power of Attorney in place whilst you are capable of understanding the nature and effect of the document.
However, if you decide not to put a Lasting Power of Attorney in place and you become unable to manage your affairs, someone (usually a family member) will have to apply to the Court of Protection to become appointed your Deputy. This can take a long time, sometimes up to 13 weeks and it would cost considerably more money than putting a Lasting Power of Attorney in place now.
Whilst you may not think that it is important to do, particularly if you are younger, it is an added level of protection for your business and for your family, who will have to pick up the pieces if you do lose capacity.
How Do I Put a Lasting Power of Attorney in Place?
You can make a Lasting Power of Attorney yourself if you choose but at Co-op Legal Services we offer a simple and straightforward way to make a Lasting Power of Attorney. We provide an appointment with a Lasting Power of Attorney Specialist over the phone to take all the information from you.
We will provide you with a fixed fee quote for making your Lasting Power of Attorney, meaning that the price you are quoted, is the price you pay.
For initial advice and guidance about a Lasting Power of Attorney call Co-op Legal Services on 03306069591 or contact us online and we will help you.
Co-operative Legal Services Limited is Authorised and Regulated by the Solicitors Regulation Authority.