Business Lasting Power of Attorney

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Creating a Financial Decisions Lasting Power of Attorney (‘LPA’) document specifically to deal with your interest or share in a business secures and protects the continuity of the business. The LPA document delegates the business owner’s role to appointed individuals (‘Attorneys’), should the business owner lose capacity or become unable to fulfil their role in the business for a specific reason. The business owner can, under the powers of the LPA document, authorise their trusted Attorney to make business decisions, enter into contracts and terminate agreements on their behalf providing some peace of mind that the business can continue to trade in the future without hindrance.

Sole Trader

It is unlikely that this business will have a separate legal entity. Therefore, a LPA in this case would be very sensible to enable the continuity of your business, should you become unable to continue trading yourself in the future.


The provisions of the Partnership Agreement, if one exists, is very important in this case. The Agreement should state whether it is possible for someone to take over another Partner’s role in the business should a Partner lose capacity. If this is not permissible, then a LPA may not be the best option. If, however, the Partnership Agreement states nothing in relation to delegation, then you should consider whether the terms of the Partnership Agreement are lawful under the Mental Health (Discrimination) Act 2013. If the Partnership Agreement terms are discriminatory by preventing an arrangement which would otherwise be acceptable, for example in this case by preventing any kind of delegation in the event of mental health difficulties, then you could argue that the Partnership Agreement is discriminatory, and those particular terms should not apply and thereby the LPA could take effect. If no Partnership Agreement exists then the LPA would be an effective way of delegating your role as a Partner to another person.

Limited Company

In this situation, the Company’s Articles of Association need to be considered in relation to delegation. Some of the standard Articles (Article 5(1) for example), do allow delegation which includes via a LPA. However, standard Article 18 automatically prevents a person being a Director if that person is medically certified as being mentally incapable and will remain in such a condition for more than 3 months.

If Articles 5 and 18 are unchanged, then the LPA can be used for delegation, but only whilst the Director has mental capacity. Article 18 would look to remove the Director if they lose mental capacity.

For any further advice in relation to the contents of this article, or to discuss Lasting Powers of Attorney in further details then please contact a member of our team.