Durable Power of Attorney for Business Owners
Running a business comes with a long list of responsibilities. But what happens if you’re suddenly unable to handle them yourself? Whether it’s due to illness, injury, or travel, your business still needs decisions made and transactions completed. That’s where a Durable Power of Attorney (DPOA) can be a critical safeguard for business owners.
A Durable Power of Attorney ensures your company keeps moving forward even if you can’t personally oversee daily operations. In this article, we’ll cover what a DPOA is, why it’s important for business owners, what powers it can include, and how to make sure it’s set up correctly.
Article Summary
- What Is a Durable Power of Attorney?
- Why Business Owners Need a Durable Power of Attorney
- How a DPOA Differs From a Regular Power of Attorney
- Choosing the Right Agent for Your Business
- Key Powers to Include in a Business DPOA
- Avoiding Common Mistakes in Creating a DPOA
- How a DPOA Fits Into Your Broader Business Planning
- About Margerie Law in Wauwatosa
1. What Is a Durable Power of Attorney?
A Durable Power of Attorney is a legal document that allows you to appoint someone — called your “agent” or “attorney-in-fact” — to act on your behalf. The word “durable” means the authority continues even if you become incapacitated.
For business owners, this document can be tailored to give someone the power to handle business-specific matters like signing contracts, managing accounts, or authorizing payroll. Without it, your business operations may be stalled until a court appoints someone to act for you — a process that can take time and create unnecessary stress for your employees and clients.
If you’re unsure how this works, you can read more about the top misconceptions about durable power of attorney.
2. Why Business Owners Need a Durable Power of Attorney
Business owners are often the decision-makers for key financial and operational matters. If something happens to you, even for a short time, your business could face:
- Missed deadlines and opportunities
- Unpaid bills and disrupted payroll
- Contract breaches or delayed projects
- Loss of client confidence
A DPOA helps avoid these problems by ensuring someone you trust can legally step in and handle necessary actions without waiting for court approval.
Without one, your business could face costly interruptions. Learn more about what happens if you don’t have durable power of attorney.
3. How a DPOA Differs From a Regular Power of Attorney
A regular Power of Attorney typically ends if you become incapacitated. That means if you’re in the hospital or otherwise unable to make decisions, the authority you granted would no longer be valid.
A Durable Power of Attorney, on the other hand, remains in effect regardless of your condition. This distinction is essential for business owners because it ensures continuity. Even during an emergency, your agent can sign checks, approve deals, and keep operations running.
4. Choosing the Right Agent for Your Business
Selecting the right agent is one of the most important decisions when setting up a DPOA. This person should:
- Be highly trustworthy and reliable
- Understand your business operations and industry
- Be comfortable making decisions under pressure
- Have good communication skills with staff, vendors, and clients
Many business owners choose a co-owner, key employee, or family member with business experience. You can also name more than one agent to handle different responsibilities — for example, one person for financial tasks and another for operational matters.
5. Key Powers to Include in a Business DPOA
A Durable Power of Attorney for a business owner can be customized to fit your specific needs. Common powers include:
- Managing bank accounts and paying bills
- Approving payroll and benefits
- Signing contracts and leases
- Buying or selling business assets
- Overseeing tax filings and compliance
- Managing lawsuits or legal claims
- Communicating with vendors and clients on your behalf
It’s important to be clear and specific about the powers granted. Too little authority can limit your agent’s ability to act, while too much can create unnecessary risks.
6. Avoiding Common Mistakes in Creating a DPOA
While a DPOA can be powerful, mistakes in creating one can lead to disputes or delays. Common issues include:
- Using a generic form instead of a business-specific document
- Failing to update the DPOA as your business grows or changes
- Not communicating with your agent about your expectations
- Leaving out key powers needed for your industry
- Not having the DPOA properly executed according to state law
Working with an experienced estate planning attorney who understands both business law and succession planning ensures your DPOA is enforceable and aligned with your goals.
7. How a DPOA Fits Into Your Broader Business Planning
A Durable Power of Attorney is just one piece of a solid business protection plan. It works best when paired with other legal tools and strategies, such as:
- Operating agreements that outline decision-making authority
- Buy-sell agreements that protect ownership interests
- Succession planning to prepare for a permanent transition
- Updated wills and trusts to manage personal and business assets
An estate planning lawyer can also help integrate your DPOA with these tools. You can explore more in estate planning benefits for small business owners.
8. About Margerie Law in Wauwatosa
At Margerie Law in Wauwatosa, we help business owners protect their companies through thoughtful, proactive legal planning. Serving clients in Wauwatosa, Brookfield, Milwaukee and beyond, our team has deep experience in both business law and estate planning. We work closely with small business owners, entrepreneurs, and family-run companies to create customized Durable Powers of Attorney that fit your unique needs.
Whether you’re preparing for the unexpected or integrating a DPOA into a larger succession plan, our Wauwatosa estate planning attorneys provide clear guidance and practical solutions. We focus on making the process easy to understand and ensuring your plan works when it matters most.
By Paul Margerie, Owner of Margerie Law
Paul Margerie of Margerie Law is a knowledgeable and experienced estate planning attorney based in Wauwatosa, WI. With years of experience helping families and individuals with their estate plans, he offers a gentle touch that puts his clients at ease. He understands the sensitive nature of this work and ensures that all details are taken care of with precision and accuracy. He strives to help each client achieve peace of mind that their future is protected by providing personalized advice and creating tailor-made solutions that fit their individual needs.
