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Why Can a Business Lasting Power of Attorney be Useful?
Why Can a Business Lasting Power of Attorney be Useful?
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A Lasting Power of Attorney (LPA) is a legal document that allows those nominated as Attorneys to make decisions on the person's (Donor’s) behalf.


LPAs came into force in October 2007, replacing Enduring Powers of Attorney.

If an individual made an Enduring Power of Attorney (EPA) before October 2007, it is still valid but only in relation to property and financial affairs.



It is important for any business owner to consider what would happen to their business and the day-to-day running of it if they were unable or unavailable to make decisions.

As with a personal LPA, a business lasting power of attorney ‘BLPA’ allows the donor to choose and appoint individuals to act on their behalf with regards to their business, in the event that they are unable to do so themselves. This could be due to unavailability, for example being abroad or, more seriously due to lack of mental capacity, particularly as there is a common misconception that financial institutions will allow a joint account holder to continue to access and use funds of a joint account where one of the owners and/or signatories has lost mental capacity.

It is common for financial institutions to freeze accounts and overdraft facilities to protect the vulnerable individual. If an individual has entered into a contract but has since lost mental capacity the contact is capable of becoming unenforceable. Even simple tasks such as paying a creditor or salaries can become difficult if the person so responsible has lost mental capacity.

A business LPA can be used if a business owner:

  • is abroad on holiday or for business
  • has had an accident that means they are no longer capable of acting
  • has an incapacitating medical condition that means they are no longer capable of acting



If there is no BLPA in place and a business owner has lost mental capacity or is unavailable to action a task then an application needs to be made to the Court of Protection to have a ‘deputy’ appointed. There is no guarantee at this stage that the Court will appoint an individual who the business owner would have chosen. Additionally, the process is far more costly and time consuming which could expose the business to greater risk.


  • sole trader as they are not a separate legal entity to their business;
  • a person who is self-employed as they are not a separate legal entity to their business;
  • director of a company if a director’s incapacitation is not covered by the Articles of Association or Memorandum of Association;
  • partner within a partnership if a partner’s incapacitation is not covered by the articles of association or memorandum of association


Whilst most businesses undergo crisis management – identifying and preparing for probable risks, such as floods, computer hacks or theft, very few businesses consider preparing for significant business decision-makers being incapacitated.

As advised by The Law Society ‘to avoid disruption, it should be part of any business owner’s continuity plan and crisis management strategy to consider making a business lasting power of attorney’.

For more information on any of the above or to discuss Business LPA’s generally, please contact Tyla Robins, Solicitor, by email:,or by telephone 0207 644 7278 or contact her on LinkedIn.


This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. 


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