Many people believe that losing mental faculties is only something that happens with age, however this is not always the case. People can unfortunately lose the ability to look after their own affairs for several reasons, such as an accident or illness, which can strike at any age.
This is a concern for business owners and co-owners. If they were to lose mental faculties, especially with no, or little, warning it could have a significant impact on the continued running of the business.
As with someone`s personal affairs, if they were no longer able to look after their own financial (including business) affairs, then no-one is authorised to do so on their behalf without having been appointed as an attorney by them in a Lasting Power of Attorney (LPA).
Even in long term business relationships, business colleagues will often not be able to deal with a colleague`s business interests, or carry out their normal activities in running, or working in, the business, without an LPA.
If the person who loses faculties had prepared a Property and Financial Affairs LPA, but had not placed any restrictions on what their attorneys could do (such as stating that they were not authorised to deal with their business interest), there is a risk that their attorneys ( who may well not have had any previous involvement in the business) would be authorised to do so.
If no steps are taken to protect against this, it could result in issues and complications in the running of the business at what is already a stressful time.
You can protect against this by preparing Commercial LPAs.
In a Commercial LPA, you can appoint people who would be best suited to look after your business interests as your attorneys. You should also prepare separate Property and Financial Affairs LPAs to deal with your personal property and financial affairs.
In order to ensure that both your personal and business interests are dealt with separately by the relevant attorneys, your Commercial LPA should include the restriction that the commercial attorneys are only authorised to deal with your business interests.
Likewise, your personal Property and Financial Affairs LPA should include the restriction that the personal affairs attorneys are not authorised to deal with the business interests.
As with a Property and Financial Affairs LPA, a Commercial LPA could be used once it has been registered with the Office of Public Guardian and not only if you had lost or were losing mental faculties. This therefore offers flexibility where for example, you may be overseas and unable to sign business forms, your attorneys could do so in your absence.
Therefore, by preparing Commercial LPAs, you can ensure that your business need not be affected directly in the hopefully unlikely scenario of your losing your mental faculties. It also offers you, and your colleagues, flexibility, security and peace of mind.