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Effective Lasting Powers of Attorney to protect your business

Effective Lasting Powers of Attorney to protect your business
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Effective Lasting Powers of Attorney to protect your business
Edward Walter by Edward Walter
Solicitor - Buss Murton Law

You may be familiar with Lasting Powers of Attorney in private law; they are often taken out to ensure that the interests of an elderly person are protected should they no longer be able to make their own decisions effectively.  But they are just as important in the commercial world.  As Ed Walter of Buss Murton Law, argues, it’s worthwhile investing to make sure you know your LPA is watertight.

Growing popularity of LPAs

If you haven’t heard of LPAs, the likelihood is it’s a term you will come across soon: they are growing in popularity, with a 30% rise in the applications for registration received between April and June this year compared to the same period in 2016.

Our ever-aging population is, of course, a key contributing factor to the growing need for LPAs, but such a large hike in applications over a 12-month period far outweighs our growing longevity.  The increase is partly due to a greater awareness of the value of an LPA, which gives your nominated Attorneys the legal authority to look after specific aspects of your finances, health and welfare, should you lose the capacity to make these decisions yourself.  This means an LPA has to be made while you still have full mental faculties; it therefore puts you in control, making it more attractive than other alternatives, such as a Deputyship Application, which is made on your behalf if you have lost mental capacity. 

LPAs for businesses

LPAs are often associated with the elderly, however they have equal value in business.  If you have a business partner, consider what would happen if they lost mental faculties.  You may think it unlikely that they will suddenly succumb to early onset dementia, but it’s worth thinking about how your business would survive if they, or you, suffered a life-changing stroke or suffered serious brain injury in an accident.  In many partnerships, such an event would paralyse the business, possibly to the extent of it going under.  LPAs are therefore as much a business must-have for partnerships as employment contracts and data protection policies. 

Online applications – a word of warning

Another factor behind the increase is possibly the introduction of an online application process; combined with a recent decision by the Financial Conduct Authority, it is now possible to be granted an LPA online, without a wet-ink signature of the donor, a witness to that signature or the presence of a Certificate Provider.

While reduced bureaucracy may have attractions, these checks and balances do help protect against mistakes and – more importantly – fraud.  While they are not failsafe, an experienced lawyer may be able to spot someone who is trying to gain undue influence for their own gain.  Of course, using a professional comes with a price tag; but what would the cost be to you or your business if someone were to gain inappropriate control?  Arguably, some things are too important for shortcuts.

A Lasting Power of Attorney is a business essential if you have one or more partners, and one that is worthwhile getting right, for the sake of all the partners and the continued prosperity of your business and staff.

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Ed Walter is a Partner in the private Client Department at Buss Murton Law, which has been providing expert and trusted legal advice to individuals and businesses for generations.  With offices in Tunbridge Wells, Cranbrook, East Grinstead and Dartford, Buss Murton provide legal expertise to clients across the Kent, Sussex, Surrey and Greater London.  

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