Business LPA



The Mental Health (Discrimination) Act 2013 takes out the option to remove a company Director because of mental health problems. This effective makes mental health problems a protected characteristic under the S4 Equality Act 2004, so that the same rules apply for partnerships or even sole traders.

1 in 6 of us under 65 will take time off for mental health problems during our working lifetime. The term mental health covers a wide range of illnesses from long term dementia to taking time off for stress related illness and everything in between. So how would your company function without one of its key decision makers? It could have serious implications for your business.

For example what if the bank finds out? They could call in any loans or overdrafts! If they think their money is jeopardised in any way they can ask for it back. Bare in mind that if your accountant or other professional, knows about a mental health problem, they have a professional duty of care to notify anyone effected which could include the banks.

The solution is a Business Lasting Power of Attorney (LPA). A specific LPA to solely deal with your business affairs. This type of LPA can be used for a number of situations:
1. Mental health problems
2. Prolonged absence for work e.g. holidays
3. Working abroad
4. Other illnesses that might incapacitate you

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The changes in the law are so new that to date there have been no cases that test the law. However, there have been many learned comments on the law:

There are, “Cases where the donor should have made two LPA’s: one for their business affairs and the other for their personal finances.”

DENZIL LUSH, Senior Judge of the Court of Protection Elder Law Journal in July 2013, [2013} Eld JJ 144


Does this apply only apply to Limited Companies?

No the same rules apply to partnership or even sole traders

Who can be an Attorney?

Anyone with the relevant skills. This is often the most difficult aspect of the LPA, choosing the right Attorney

Does every Directors need an LPA?

Yes, anyone can be effective by mental health issues

Can the Attorney also deal with my personal finance?

Not unless you want them too, normally the LPA would be restricted to business finances only

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