Agricultural lasting powers of attorney

It is commonly reported that farming is one of the most dangerous professions.

When running an agricultural business as a sole trader, partnership or limited company, planning can often be overlooked. However, every farmer should ensure that they have a lasting power of attorney (LPA) in place so that, should they no longer be able to manage their financial and personal affairs, they are able to continue on their behalf by someone they trust.  

Increasingly, the courts are requiring a specific LPA or some other provision which enables a business to continue. Legislation does not appear to prevent an attorney acting in any trade, profession or business, but without express powers in place, businesses could grind to a halt.

Consideration also needs to be given to the type of business. A farmer in business as a sole trader does not have a separate legal entity. This probably means that a simple power of attorney will suffice.

Those in partnership will rely on provisions within a partnership agreement. If there is no written partnership agreement the courts are likely to dissolve the partnership. The position with limited companies can be even more complex. Directors can be removed by the shareholders applying to the court, but this can be costly and timely. Again, much will depend on the company’s articles or the model articles, which may be too restrictive.

Failure to review the position, and ensure that the correct documents are in place, could mean that an application to the court would be needed if there was an accident or a farmer became ill, having potentially disastrous effects on a farming business.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.