Director Lasting Power Of Attorney

Succession planning is a critical process for any business, particularly when it comes to ensuring the smooth transition of leadership and control. For companies with directors who play a pivotal role in the day-to-day management of the business, it’s essential to have a plan in place that addresses what will happen if a director becomes incapacitated or unable to perform their duties. One of the key tools in this planning is a Director Lasting Power of Attorney (LPA). At Blackstone Solicitors, we understand the complexities of succession planning and the importance of safeguarding your business’s future.

Contact us today and we can talk you through our services and how we can help you and your family. Simply call us on 0345 901 0445 or complete our online enquiry form and a member of the team will give you a call back as soon as possible.

At Blackstone, we always aim to provide the best service possible. Meticulous in our approach, we will make sure everything is dealt with as you wish and will keep you updated throughout the legal process, ensuring that you always know of any developments.

“I received very good service and advice, given to me on a week by week basis. I would strongly recommend Blackstone.”

– Paul

Our Services

We can provide help with a wide range of matters relating to Succession Planning, including:

We have partners we work closely with that can advise upon:

Tax Planning including advising on capital gains tax and income tax for individuals, businesses, landed estates, professionals, entrepreneurs and advice on matters including business relief, exemptions and retirement planning.

What Is a Director Lasting Power of Attorney?

A Director Lasting Power of Attorney is a legal document that allows a director of a company (the “donor”) to appoint one or more individuals (the “attorneys”) to act on their behalf in relation to their duties as a director, in the event that they become unable to do so themselves. This could be due to illness, injury, or mental incapacity.

While most people are familiar with the concept of a Lasting Power of Attorney in relation to personal financial affairs or health and welfare decisions, the idea of an LPA specifically for a director’s role is less well-known but equally important. It ensures that the business can continue to operate smoothly and that the director’s responsibilities are managed by someone they trust.

Why Is a Director LPA Important in Succession Planning?

A Director LPA is a vital part of succession planning for several reasons:

Ensuring Business Continuity

If a director becomes incapacitated, it can lead to significant disruption in the management and operation of the business. A Director LPA ensures that there is a clear plan in place for who will take over the director’s duties, allowing the business to continue functioning without interruption. This is particularly important in small to medium-sized businesses where directors often have a hands-on role in daily operations.

Avoiding Uncertainty and Disputes

Without a Director LPA, there may be uncertainty about who has the authority to make decisions on behalf of the incapacitated director. This can lead to disputes among shareholders, other directors, and even family members. By appointing an attorney through a Director LPA, the donor ensures that their wishes are clear and that there is a designated individual with the legal authority to act on their behalf.

Protecting the Company’s Interests

A Director LPA helps to protect the company’s interests by ensuring that important decisions can still be made in the absence of the director. This can include signing contracts, managing finances, and making strategic business decisions. Without a Director LPA, these tasks could be delayed or go unmanaged, potentially harming the company’s operations and financial health.

Facilitating a Smooth Transition

In the context of broader succession planning, a Director LPA can facilitate a smoother transition of leadership by providing a temporary solution while long-term succession plans are implemented. It allows the company to maintain stability during a potentially challenging period, giving shareholders and other stakeholders confidence in the business’s future.

Setting Up a Director LPA

Setting up a Director Lasting Power of Attorney involves several key steps. It’s important to approach this process with careful consideration and seek professional legal advice to ensure that the document is properly drafted and reflects the donor’s wishes.

Choosing the Attorney(s)

The first step in setting up a Director LPA is choosing who will act as the attorney(s). This should be someone the director trusts implicitly to make decisions in the best interest of the business. The attorney could be a fellow director, a trusted colleague, or a professional adviser. It’s also possible to appoint multiple attorneys, who can either act jointly or independently, depending on the donor’s preferences.

Defining the Attorney’s Powers

The Director LPA should clearly define the scope of the attorney’s powers. This might include the authority to make decisions related to the company’s finances, enter into contracts, manage employees, and make strategic business decisions. The document should also specify any limitations on the attorney’s powers, ensuring that they act within the parameters set by the donor.

Considering Company Articles and Agreements

Before setting up a Director LPA, it’s important to review the company’s Articles of Association and any shareholder or partnership agreements. These documents may contain provisions related to the appointment of attorneys or the delegation of directors’ duties, and the LPA must be consistent with these provisions to avoid conflicts. In some cases, it may be necessary to amend the Articles of Association to accommodate the Director LPA.

Completing and Registering the LPA

Once the Director LPA is drafted, it must be signed by the donor, the attorney(s), and a certificate provider, who confirms that the donor understands the document and is not under any pressure to sign it. The LPA must then be registered with the Office of the Public Guardian before it can be used. The registration process typically takes several weeks, so it’s advisable to complete this step well in advance of when the LPA might be needed.

Communicating with Key Stakeholders

After the LPA is registered, it’s important to inform key stakeholders within the company, such as fellow directors, shareholders, and senior management, about the arrangement. This ensures that everyone is aware of the plan and understands who will take over the director’s duties if the LPA is activated.

What Happens If There Is No Director LPA?

If a director becomes incapacitated without a Director LPA in place, the company may face significant challenges. Decisions that require the director’s input may be delayed, and there may be uncertainty about who has the authority to act on the director’s behalf. In some cases, it may be necessary to apply to the Court of Protection for the appointment of a deputy to manage the director’s affairs, which can be a lengthy and costly process.

Our Approach

We are 100% committed to ensuring each and every one of our clients receives the highest quality service and we will go the extra mile to ensure that you are happy with the results gained. We understand it can be particularly difficult to deal with matters relating to death and inheritance, and this is why our friendly and approachable team always take a sympathetic and understanding approach, ensuring that you receive the support you need.

We believe communication is of the utmost importance. We will therefore keep you updated as things develop and our solicitors will provide practical, straightforward legal advice so that you can be confident everything is progressing as you would like.

Get in Touch

Contact us today to discuss any matter relating to Succession Planning. We can talk about your situation in depth and get to the bottom of what you need and how we can help. We are here to answer any questions which you have, and we aim to make everything as simple for you as possible.

Our team is approachable, professional and vastly experienced. We will do everything in our power to help you get the outcome you need. Call us on 0345 901 0445 or, if you would prefer us to contact you, leave your details via our online enquiry form.

We offer our services to clients in Manchester, Chester, Cheshire and throughout the rest of the UK. We also have an office in London.