A company power of attorney is a valuable and essential legal document that allows a company or individual to appoint a power of attorney. The appointed person or persons can act, make decisions and sign documents on the company or individual’s behalf. This article will go through the scope of powers for an attorney (in the context of a company appointment). It will also explain the steps to create a company power of attorney, what to include in the document, and how to revoke a power of attorney.
Granting a Power of Attorney
A company can grant a power of attorney to one or more people. This is a significant decision and one that requires careful consideration.
Once a company chooses an individual, the appointed person will autonomously carry out certain tasks. Therefore, they must have appropriate decision-making capacity. Likewise, the appointed attorney should also be suitable, a trusted person, and have the company’s best interests in mind when carrying out their duties.
In addition, there are other legal requirements, namely, they should:
- be over 18 when taking the role;
- be a New Zealand resident;
- not be bankrupt; and
- not be suffering from any legal incapacity.
Scope of Powers for a Power of Attorney
The scope of power granted under a power of attorney can vary according to the company’s needs. The powers and duties can be as broad or narrow as the company chooses and can be given to one or more persons.
Importantly, the power of attorney documentation will state the range of abilities an attorney has. The attorney’s powers can be in relation to a:
- specific event (for example, signing a particular contract with a particular business);
- specific purpose (for example, signing documents relating to financial matters only);
- certain length of time; or
- specific property.
Notably, it is possible to grant unlimited or general power and duties.
Continue reading this article below the formSteps to Creating a Company Power of Attorney
First, check your company constitution to see rules about how you should run your company. If your company does not have a constitution, then your company will be governed by the Companies Act. According to the Companies Act, you can appoint one or more attorneys through a written contract.
Second, you will need to sign a formal power of attorney document. It is important to get legal assistance with this document to ensure it is legally binding and accurately reflects your intentions and delegation of authority. A power of attorney must be signed on behalf of the company by:
- a director of the company if it only has one director;
- not fewer than two directors if the company has two or more directors; or
- one director or another person if the company constitution authorises deeds to be signed in this way.
The person signing the deed as an attorney will need a witness present. Additionally, the witness:
- must not be party to the deed;
- must sign the deed; and
- note where they ordinarily reside and their occupation.
What to Include in a Power of Attorney
It is essential to include all relevant matters in the company power of attorney. It is essential to carefully consider these matters and select the right person for the role.
Additionally, when drafting the power of attorney, there are several things to include, such as:
- who are you appointing as the attorney (this can be more than one person);
- what is the scope of their powers (what they can and cannot do); and
- how long will the power of attorney last (if the attorney is only appointed for a specific purpose, then this should be stated. However, the appointment can last for a period of time such as two years).
Revoking a Company Power of Attorney
If needed, your company can revoke a company power of attorney. Revocation methods should align with the process outlined in the power of attorney. Examples of reasons for a revocation of power of attorney include:
- dissolution of the company through bankruptcy or other reasons;
- resolution of board of directors by signing a formal deed of revocation as in the Property Law Act;
- appointment of a new or replacement power of attorney; and
- the power of attorney naturally ends if your governing document specifies an end date.
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Key Takeaways
A company can appoint a power of attorney by signing a formal document. You need to carefully consider who you want to appoint as the power of attorney so that a trustworthy person(s) is in the right role to make company decisions. Additionally, it is vital to set out in the company power of attorney who the attorney is, the attorney’s powers, and if the appointment of the attorney will naturally end at a certain time. However, if necessary, you can also revoke the attorney’s appointment under the power of attorney.
If you need help with drafting a company power of attorney in New Zealand, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0800 005 570 or visit our membership page.
Frequently Asked Questions
A company power of attorney is a legal document that can allow a company to appoint a person or persons to act and make decisions on the company’s behalf. It sets out the range of powers the attorney may have and when their powers may end.
A power of attorney allows for certain signing and decision making authorities to be delegated. It is beneficial if, for example, a sole director loses the capacity to make decisions, is away overseas, or dies.
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