Can a director delegate his authority qua director to an attorney by an LPA?

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Published on LexisPSL on 26/01/2017

The following Private Client Q&A provides comprehensive and up to date legal information covering:

  • Can a director delegate his authority qua director to an attorney by an LPA?
  • Business LPAs
  • Ordinary power of attorney

Business LPAs

A business LPA (BLPA) allows the donor to appoint an attorney to make decisions concerning their business interests, either when they are unavailable or lack mental capacity. A BLPA is to be distinguished from a Property and Financial Affairs Lasting Power of Attorney, which is created to manage an individual’s personal finances. Practice Note: Business and commercial LPAs note that EPAs and LPAs are usable to make business decisions. Senior Judge Lush of the Court of Protection has commented that there are cases where the donor should have made two LPAs—a personal LPA (for financial affairs and health and welfare if desired) and an LPA for their business affairs. See Lush [2013] Eld LJ 144.

BLPAs should also be distinguished from ordinary powers of attorney (POA), which are widely used by businesses to manage commercial situations. BLPAs should be seen as an extension of managing business interests, as part of business crisis management and reducing business risk. Unless the donor of BLPA is a sole director, he or she may not appoint an individual to be a director in his or her place without approval from the board of directors—see Armitage Holdings Inc v Delahunty; Delahunty v Armitage Holdings Inc at para 12. However, under the rules of agency a principal (donor) may appoint a proxy (attorney) to make decisions on their behalf. This

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