Are you a business owner? If so, it’s really important that you are aware of the consequences of what would happen if you, or one of your business partners, lost mental capacity.
People often think of the loss of mental capacity as being associated with old age but sadly, yet realistically, accidents and unexpected illnesses causing a serious decline in somebody’s mental capacity can happen at any age.
As with personal Lasting Powers of Attorney (LPAs), the key is to ensure that the documents are prepared and registered (with the Office of the Public Guardian) before mental capacity is lost. If you lose mental capacity and have not put LPAs in place, a Deputyship application would need to be made to the court and this is often an extremely lengthy and time-consuming process.
If you are a sole trader, your business is essentially ‘you’. Who would deal with your business finances in the event that you no longer had the mental capacity to do so? If you don’t think the people you trust to look after your personal finances are also the right people to look after your business finances, then you will need to register two separate Property & Finance LPAs. Doing this allows you to think carefully about who understands the way your business runs and how your transactions take place, to ensure the right ‘attorneys’ are appointed.
If you are a partner or director in a partnership or limited company your bank accounts may be frozen if you, or one of your partners, loses mental capacity. How would you pay your employees and your suppliers, continue the day to day running of the business, deal with tax related matters or handle investments? Subject to the terms of your partnership agreement or articles of association, you should ensure carefully chosen attorneys are appointed to take these steps and make these decisions on your behalf.
You are able to limit the powers your Business LPA gives your attorneys, if you deem it necessary, but having the documents in place could be essential in enabling the business to be able to continue to trade.
If you’d like to discuss this further, please contact us to make an appointment.
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