Powers of Attorney for shareholders and directors

For a business owner an injury or unexpected loss of capacity, even if only temporary, can have a significant impact. 

To ensure that a business continues to operate successfully in these circumstances, all business owners (sole traders, partners and company directors) should consider putting a Lasting Power of Attorney (LPA) for property and financial affairs in place which is specifically tailored towards their needs.    

A LPA is used to appoint someone (known as an Attorney) that is trusted to step in if the circumstances require.  In the context of a business, without a business LPA being in place, it could mean that no-one is authorised to sign cheques or make payments on the business bank account which has a knock on effect for the likes of suppliers, staff and creditors.  The business would be put under a huge amount of unnecessary strain and could, in certain circumstances, “go under”. 

For business owners specifically, it is important to choose someone who is familiar with the business and has a “business mind” to step in with the authority to make the necessary decisions. In addition to a business LPA, company directors should also review the company’s Articles of Association to see what happens on the loss of capacity of a director as the LPA and the Articles of Association need to work alongside one another.

It is entirely possible for a business owner to have a LPA in place to deal with property and financial affairs which are not connected with their business (i.e. for personal finances), but the two LPAs need to be carefully drafted so that the business and personal LPAs work effectively.  It is often the case that the Attorney of a personal LPA is a family member or other person of trust.

Jon Gould, Head of Private Client at our Newcastle office, comments “A business LPA is essential for a business owner no matter how big the business is.  The LPA should be seen as akin to an insurance policy which is there to be used if required.  Without a LPA, if the business owner was to become incapacitated, an application would need to be made to the Court of Protection in order for someone to be appointed as Deputy. This is a costly and time consuming exercise and the business is likely to suffer as a result”.

The Private Client team at DWF are experts in acting for business owners and directors. We can ensure that an appropriately worded business LPA is put in place to run alongside a personal LPA so that the ongoing succession of the business is better protected.  If you need any assistance please do not hesitate to get in touch.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

Jon Gould


I advise a wide range of clients on all aspects of private client law.