Business – Using Powers of Attorney in Lockdown

We’ve had several enquiries about using powers of attorney in a commercial capacity given the restrictions in place and thought we would set out the broad principles to bear in mind.

Please note that the following is an general overview to consider rather than specific legal advice for any one set of circumstances, but please do get in touch if there is anything we talk about that you would like further details on or legal advice tailored to you.

An ordinary power of attorney (“PA”) is a formal appointment which can be made by a company authorising another entity (company or individual) to execute documents on its behalf. Such authority must be given by the company giving a power of attorney in favour of the company or individual as the case may be.

A PA must be executed by deed and the company’s internal rules should be reviewed to ensure that it is able to give a PA with any decision to do so approved and minuted at board level in the usual way.

A PA is usually are limited to authorising the Attorney to execute documents relating to a specific transaction or transactions. The PA can do this but can give a general power to execute anything required in relation to a transaction or indeed generally – for example, a company could give a PA to its lawyer to execute documents on its behalf.

Do remember this a delegation of power by a company, the well-established principle that a director cannot delegate his or her responsibilities to act as a director, or to attend board meetings still remains. Similarly, an individual director cannot appoint an attorney to sign documents on behalf of a company in their place.

Please get in touch if you would like any support or help on this from us.