Lasting Powers of Attorney ('LPAs') enable a person to authorise someone else to make decisions on their behalf, in the event of physical or mental incapacity.

There are two types - Health LPAs, and Property and Finance LPAs.

Usually, LPAs cover personal affairs, but can also deal with financial matters in business with a Business LPA ('BLPA').

A BLPA enables partners in a business, members of an LLP, sole traders and directors to ensure that if a key decision maker is unable to act, someone else can do so. The person making the BLPA (the 'Donor') can specify what tasks the attorney can undertake relating to running the business. The Donor can also make a separate memorandum to set out their wishes for the business as guidance for the attorney.

Who to choose?

The attorney must understand the business and how it operates, such as an employee (assuming there are no conflicts of interest) or a third party, possibly in a related field. An attorney should be trustworthy, competent and reliable, with the skills and ability to carry out the necessary tasks.

I already have an LPA - why do I need a BLPA?

An attorney appointed under a personal Property and Financial Affairs LPA can take business decisions, but may not have the necessary skills to do so. A BLPA enables the Donor to appoint someone specifically for the purpose of taking business decisions, taking precedence over the personal LPA for business matters.

What if I don’t have an attorney?

At worst, if the Donor loses capacity to run the business it could cease to operate, ultimately leading to claims made against the company for its failures. In that case, an application would have to be made to the Court of Protection for the appointment of a Deputy - a lengthy, expensive, and restrictive process.