What is a Business Power of Attorney (BPA)?

When planning for life’s ‘worst case scenarios’, we often focus on our personal lives and families. However, for business owners, it is just as important to plan for your company and other valuable assets which may include a Business Power of Attorney (BPA).

You may have heard the term Lasting Power of Attorney (LPA) before, and may even have one already in place, which allows you to appoint someone you trust to manage your affairs if you become unable to do so yourself due to illness, injury, or mental incapacity. This can include decisions such as where you should live, what medical treatment you should receive, as well as financial arrangements like managing your bank accounts and paying your bills.

Most people choose a close family member or friend for this role, usually from a younger generation with the hope that they will outlive them or still have the right level of mental capacity to look after your affairs when called upon. Who comes to mind for you?

Now, keeping that person in mind, if you are a business owner, ask yourself how they would cope in also managing your business affairs? How well do they know your business? Do they have the time to take on this additional responsibility? Is there someone better suited to the role?

Similar to a regular LPA, a Business Power of Attorney is a legal document that allows you to appoint someone to manage your business in the event that you become unable to do so, including if you are unavailable at the time, for example out of the country. A BPA can be especially useful for sole proprietors or small business owners who do not have partners or employees to take over the business in their absence.

Whilst you can appoint one LPA to oversee both your personal and business life, it may not always be beneficial to do so. A friend or family member may be the best point of call that you would entrust with your health and well-being, however, they may not be particularly skilled, knowledgeable or capable of making decisions relating to your business.

Furthermore, having no Business Power of Attorney in place can also cause problems. Whilst you may have someone in mind that would perfectly fit the role, if they have not been legally appointed then they may not be able to access bank accounts, sign contracts or take important actions, which could result in significant delays and problems within the business. Appointing someone to specifically make important business decisions on your behalf can ensure the smooth running of activity such as financial transactions, legal representation, contract signing, providing business continuity and peace of mind for both you and the wider company.

Consider who you would choose in both your personal and business life, and whether you could benefit from a separate Business Power of Attorney. Our Independent Financial Advisers are here to help you in doing this, as well as answering any questions you may have.