Page 98 - LCNL Diwali Magazine

RAGHUVANSHI 2023 - 2024 HAPPY DIWALI

The Crucial Importance of Lasting Powers of

Attorney for Business Owners

In the world of business, the ability to make decisions swiftly and effectively is paramount. However, what
happens when a business owner becomes incapacitated due to illness, accident, or age-related cognitive
decline? Without proper legal provisions in place, the consequences can be severe. Lasting Powers
of Attorney (LPA) stand as a critical instrument to ensure the smooth operation and protection of a
business when the owner can no longer manage it personally. In this article, we will explore why LPAs are
indispensable for business owners and the implications of not having one in place.
The Significance of Lasting Powers of Attorney:

Business Continuity:
One of the primary benefits of having an LPA in place is the assurance of business continuity. In case a business owner is unable
to make decisions, the appointed attorney can step in to manage business affairs. Without this legal provision, a business may
face instability, leading to financial losses, contractual disputes, and potentially even closure.
Safeguarding Assets:
LPAs allow business owners to designate trusted individuals who can manage and protect their assets. By specifying how
decisions should be made concerning the business, a business owner can prevent unauthorized access to assets or any financial
misuse that may occur in their absence.

Decision-Making Authority:
In the absence of an LPA, decisions regarding the business may fall into the hands of a court-appointed guardian. This can
result in decisions that may not align with the business owner’s vision and values. LPAs enable business owners to retain control
over who makes critical decisions on their behalf, ensuring that their legacy is maintained.
Implications of Not Having an LPA:

Legal Delays:
Without an LPA, business operations can come to a standstill if the owner becomes incapacitated. Legal processes to appoint a
decision-maker can be lengthy and costly, leading to delays in important decisions, such as paying employees, signing contracts,
or accessing bank accounts.
Business Vulnerability:
In the absence of an LPA, a business becomes vulnerable to external threats, such as hostile takeovers or disputes among
stakeholders. These vulnerabilities can jeopardize the financial stability and reputation of the business.

Financial Turmoil:
When a business owner is unable to make financial decisions, financial stability can quickly erode. Without an LPA, assets may
be mismanaged or misappropriated, resulting in monetary losses and potential bankruptcy.

Conclusion:
Lasting Powers of Attorney are not just legal documents; they are crucial tools that offer peace of mind and protection for
business owners. By designating a trusted individual to manage their business affairs in their absence, business owners can
ensure continuity, safeguard their assets, and maintain the integrity of their businesses. The implications of not having an LPA
in place can be financially and legally devastating, making it clear that these legal instruments are essential for every business
owner. In summary, LPAs are a proactive step that business owners should take to secure their business’s future and their own
peace of mind.
Reena Popat - Director of Carter Bond Wills & Probate

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