Many business owners put everything they have into running their company day to day. But what happens if something unexpected stops them from being able to make key decisions? An accident, illness, or unexpected event could leave a business in limbo. That’s where a lasting power of attorney comes in.
Putting this document in place lets someone you trust act on your behalf when you can’t. It’s a smart step that helps protect day-to-day operations and keep things running smoothly. For directors and business owners handling responsibilities in London, working with lasting power of attorney solicitors in London means you don’t leave anything to chance.
Thinking ahead now helps avoid delays and stress later, especially when timing matters. A lasting power of attorney for business isn’t just paperwork, it’s a way to keep your business steady, even in tough situations.
Why Business Owners Need a Lasting Power of Attorney
Running a business comes with daily decisions, financial tasks, and legal responsibilities. If one of the main decision-makers becomes unable to act, it can cause real disruption. A lasting power of attorney helps reduce risk and keeps the business stable.
• It protects the structure of the business if a key person, like a director or founder, becomes incapacitated.
• It prevents delays in tasks like paying salaries, accessing business bank accounts, or signing contracts.
• It supports smooth board decisions, helping your company stay active and responsive, even during a crisis.
Without an appointed attorney, a business may need to wait for a court to approve someone, which could freeze operations and hurt cash flow. By planning ahead, you keep control and reduce stress for everyone involved.
Penerley Solicitors regularly support London businesses in preparing and registering LPAs focused on property and financial affairs, providing tailored advice to match the structure and requirements of your company.
Types of Power of Attorney and Picking the Right One for Business
There are two main types of lasting power of attorney in England and Wales, one for health and welfare, and one for property and financial affairs. For business owners, it’s usually the second type that applies.
A property and financial affairs LPA lets someone make decisions about money, property, and anything financial. That includes things like banking, supplier payments, and managing business accounts. It’s the one that fits business needs best.
When choosing an attorney, think carefully. They need to understand your industry and be someone you trust to make commercial decisions. Often, directors choose a co-founder, senior employee, or fellow board member who already has a view into the business.
• Make sure the person you choose can handle the seriousness of the role.
• It may be wise to appoint a separate attorney to handle personal matters to avoid conflict.
• You can set limits to make sure the attorney only has authority over business-related tasks.
Choosing the right person helps protect your company, your shareholders, and your staff.
Setting It Up: Legal and Practical Steps
Setting up a lasting power of attorney for business isn’t something to leave for later. Start early, when everyone is clear-headed and able to talk openly about it.
You’ll need to:
1. Decide what powers the attorney should have, and what they should not.
2. Complete the official forms (LP1F for property and financial matters).
3. Register the document with the Office of the Public Guardian before it can be used.
Think about how the LPA lines up with your company’s other documents. Shareholder agreements, articles of association, and board roles may need checking to avoid conflicts. If you’re a sole trader, different issues may arise, like how personal and business roles overlap.
Being clear means fewer surprises later. Making time now to set this up can save you and your business partners from delays in the future.
Penerley Solicitors work with clients in reviewing company and partnership documentation in advance to avoid conflicts between LPA arrangements and business governance rules.
Common Mistakes and How to Avoid Them
Mistakes in setting up an LPA can lead to confusion during a crisis. It’s not always enough to simply pick someone trustworthy, you need to think through the details.
• Choosing the wrong person or being too vague in what they can do creates risk.
• Letting someone manage both personal and business finances without clear separation can cause problems later.
• Forgetting to update Companies House records and internal company logs with the new arrangement can confuse other directors or partners.
Another common mistake is thinking a general LPA is enough for all matters. If your company has specific structures or investor requirements, a business-focused LPA may be needed to match those expectations clearly.
Careful setup, with clear terms, goes a long way to keeping the business protected.
Review and Update Over Time
An LPA shouldn’t be treated as a one-off task. It needs to fit the business as it grows and changes. Regular reviews are important, especially after events like bringing in new directors, being acquired, or shifting ownership.
• Update the LPA if the person acting as attorney leaves the company, retires, or becomes unfit to serve.
• Review documents if shareholder agreements change to make sure everything stays consistent.
• Make sure board members and staff know who can act in your place and what that means for them.
Small updates ahead of time are usually easier than fixing issues after something goes wrong. Keep a secure copy of the registered LPA and make sure anyone who needs access knows where to find it.
Building Long-Term Business Security with Clear Planning
Putting a lasting power of attorney in place gives confidence that your business won’t stall during a crisis. It allows trusted hands to step in quickly and keep everyday operations stable.
This kind of planning is simple, but it goes a long way. Whether you manage a growing company, own property, or sit on a board in London, it pays to think ahead. A bit of clear foresight now can keep your business steady in the future, no matter what comes your way.
Planning ahead gives your business the best chance to stay steady through any unexpected turn. As directors, landlords, and small business owners in London know, putting a lasting power of attorney in place helps ensure your operations run smoothly no matter what arises. We work closely with each client to make the process clear and suited to your company’s needs. For straightforward support from trusted lasting power of attorney solicitors in London, contact Penerley Solicitors today.
