LPA for Business Owners: Protecting Your Company

LPA for Business Owners

If you own a business, you have more at stake than most people. Your employees, customers, suppliers, and family all depend on the business continuing—even if something happens to you.

Why Business Owners Need LPAs

Without an LPA:

• No one can access business bank accounts
• Contracts can't be signed
• Employees can't be paid
• Suppliers can't be dealt with
• The business could collapse

Real Scenario

You suffer a stroke on Monday. On Friday, wages are due. Without an LPA, no one can authorise the payment. Your loyal staff don't get paid. Some leave. Your business suffers—all preventable.

Business-Specific Considerations

What Needs Managing?

• Business bank accounts
• Signing authority for contracts
• Payroll authorisation
• Supplier relationships
• Customer commitments
• Staff management decisions

Types of Business Structures

Sole Trader: Everything is in your name. An LPA covers it all.

Limited Company: You're separate from the company, but as director, decisions need to be made.

Partnership: Check your partnership agreement—it may have provisions, but an LPA is still needed for your share.

LLP: Similar to partnership—personal LPA plus check member agreement.

Choosing the Right Attorney

Business vs Personal Separation

Consider appointing:

• Personal attorney: For personal finances and health
• Business-focused attorney: Someone who understands business

Or:

• Same attorneys for both, if they're capable

Business Attorney Qualities

• Business acumen
• Financial literacy
• Decision-making ability
• Time to commit
• Understanding of your sector

Options Include:

• Business partner (if you have one)
• Trusted senior employee
• Family member with business experience
• Accountant or solicitor
• Combination of the above

LPA Provisions for Business

Preferences Section

You can include wishes like:

• Consult with [accountant/business partner] on major decisions
• Maintain staff employment where possible
• Specific contacts for different situations
• Instructions about selling vs maintaining the business

Restrictions Section

You might restrict:

• Selling the business without consulting specific people
• Major contracts above certain values
• Changing business direction

Caution: Restrictions are legally binding—don't make them so tight they prevent necessary action.

Integration with Business Documents

Review These Documents:

• Partnership agreement: What happens if you lose capacity?
• Shareholders' agreement: Similar provisions?
• Company articles: Director incapacity clauses?
• Insurance: Key person insurance in place?

Create Consistency

Ensure your LPA works with these documents, not against them.

Practical Steps

1. List Business Authorities

What do you currently do that needs cover?

• Banking
• Contract signing
• Staff authorisation
• Regulatory matters

2. Identify Key People

Who currently supports these functions? Who could step up?

3. Create Documentation

Don't rely on memory—create a document listing:

• All business accounts and contacts
• Key relationships
• Regular commitments
• Critical dates and deadlines

4. Brief Your Attorney

Ensure they know:

• How your business works
• Who the key contacts are
• Your priorities
• Where to find information

Business Continuity Planning

An LPA is part of broader continuity planning:

Also Consider:

• Key person insurance: Financial cover if you can't work
• Deputy arrangements: Who runs things day-to-day?
• Succession planning: Long-term business future
• Documentation: Can others access what they need?

Company Director Considerations

As a director, you have duties. If you lose capacity:

• Someone needs to exercise director functions
• This is separate from your personal LPA
• Consider a corporate power of attorney
• Or provisions in company documents

Complex structures: Get professional advice on how personal LPA interacts with corporate governance.

Protect Your Business Today →