Having a corporate power of attorney in place allows you to direct your lawyer to sign documents on behalf of the company in the event that you are unable to communicate with your lawyers and other representatives in person. These documents will then have the same legal force as if they were signed by a director who is authorized to do so. This implies that business as usual will continue for you and any transactions you engage in during this unsettling time.
An official instrument created by a business that gives someone permission to act and sign documents on its behalf is called a company power of attorney. We refer to this person as a “attorney.” Any documents included in a company power of attorney may be executed by the attorney with permission. These could be specific document kinds or any other documents that the lawyer deems appropriate.
A Company Power of Attorney: What Is It
The law states that a corporation works through its directors and have the same legal personality as an individual. This implies, for instance, that a business and an individual can engage into contracts in the same way. On behalf of the corporation, directors sign documents and make decisions. Nonetheless, the business cannot function properly if the directors are unable to act on the company’s behalf. A corporation’s directors designate an individual to serve as the organization’s attorney through the creation of a corporate power of attorney.
After that, the lawyer will be able to act in the ways that their power of attorney permits. This could entail making business decisions and carrying out paperwork, such signing contracts. The power of attorney of a company is a document typically used to manage finances on the company’s behalf. When drafting a firm power of attorney, there are a number of things to take into account. These are:
- Is a power of attorney for your business necessary?
- Is it legal for your business to hire an attorney?
- Who ought to be the company’s legal representative?
1.Does Your Business Require a Power of Attorney?
A company will typically grant a power of attorney when one or more of its directors, who would typically sign documents on the firm’s behalf, are absent. The corporation might not be able to execute documents that require the director’s signature, for instance, if the director is hard to reach while on vacation or business.
A tiny or newly established business may find it especially crucial to have a company power of attorney. If a single director, for instance, becomes incapacitated or is unable to sign business documents, the company would cease operations since no one else will be able to approve checks or important documents that impact cash flow. Corporation law mandates that two directors, or a director and the company secretary, sign documents for firms with two directors. This indicates that the company might not be able to sign contracts and documents if a director becomes incapable of doing so or becomes unavailable. Having a power of attorney can help with this.
2. Is it Legal for Your Company to Hire Attorneys?
First and foremost, a business needs to confirm that it is authorized to provide a corporate power of attorney. The company’s articles of organization may contain this authority; as a starting point, these should always be reviewed. Regulation 71 of Table A and Regulation 5 of the Model Articles allow the directors acting in their capacity as a board to designate an attorney to act on behalf of the company. You might be able to rely on a statutory right if the articles do not grant you this authority. A board resolution would then need to ratify the statutory right. A corporate power of attorney will not always help if any documents (like bank mandates) can only be signed by a specific director; in this case, please get in touch with us. It is important to note that there is no statutory authority for a company to grant a power of attorney on behalf of any individual director.
A board meeting ought to be called as soon as the authority to execute a corporate power of attorney has been determined. By phone, a board meeting can be conducted remotely. The minutes of the board meeting must include information about who has been authorized to sign the power of attorney, why the board feels the document is required, and what authority it is transferring.
The individual assigned to sign a corporate power of attorney at the board meeting must do so in the same manner as a deed. In order to mail the original deed to the person to whom they are transferring the power of attorney—their lawyers or advisors—this individual must ensure that they can get to a post box and have their signature witnessed by a third party. Although it would be ideal, this person does not have to be a director.
3. Who Should Be Selected to Be the Company’s Legal Counsel
Selecting the appropriate person or persons to serve as your company’s attorney should be done carefully. It is imperative that you ascertain the duration of the lawyer’s employment and any restrictions imposed on their power. A company’s power of attorney should always clearly document the transfer of authority to someone who does not otherwise have it. Furthermore, it is imperative that you consistently convey to the lawyer the boundaries of their authority so that they are aware of their rights and responsibilities. This should reduce the possibility that the lawyer may act improperly.
An attorney is designated by the company via a legal document known as a company power of attorney to operate on the firm’s behalf. It is significant since it delegated authority to another individual to complete company tasks.This holds significance in circumstances where the organization (via its executives) is incapable.Selecting a lawyer for your business is a significant task. So, before you draft a document, make sure you have legal counsel. The person you want to appoint as an attorney should be carefully considered, and you should make sure the appointment is properly documented.