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There is a range of situations where companies can find it useful to create a company power of attorney. This legal document gives a person the legal authority to act on the business’ behalf. The appointed power of attorney will often help execute documents, negotiate contracts, or sell property on behalf of the business. They can provide flexibility to a company board if directors are away or otherwise unavailable to carry out important tasks. This article will set out what a company power of attorney is, what businesses use them for, and what you need to consider if you are creating one. 

What Is a Company Power of Attorney?

A company power of attorney is a legal document which gives an individual certain legal powers for the business. This individual becomes the company’s attorney for those purposes.

The legal powers given to a company attorney can be quite specific, such as to act on the company’s behalf during a property sale or negotiation. They can also be broad, giving a company attorney the ability to sign any documents for the business or act on its behalf on any matter.

While company attorneys are sometimes treated as company directors, this is incorrect. It is important to understand some of the differences between them:

  • directors are directly responsible for the company; a power of attorney often provides limited responsibilities;
  • directors are subject to directors’ duties under New Zealand law; and
  • there are limitations on who can become a director that does not apply to company attorneys.

When Should You Create a Company Power of Attorney?

Since powers of attorney can be very flexible, companies often use them in situations where something unpredictable occurs, which might slow down the company’s processes. For instance, where a director who would normally sign documents on behalf of a company is away or ill. In that case, a power of attorney can give another person in the company the power to execute those documents instead of the absent director. Hence, the company’s business can continue.

Other examples where you might create a company power of attorney include:

  • if a director is away on holiday and is unexpectedly difficult to contact; 
  • in companies with one or two directors, so that another person can be on standby in case one of the directors is incapacitated for any reason; or
  • to give a specific person authority in an area of specialty or expertise, such as property transactions or negotiations.

What Should You Consider?

The most important thing to consider is who to give the legal authority to when creating a company power of attorney. The legal powers granted can be significant, and the company will be bound by the decisions or acts of that person. For that reason, it is essential to pick someone trustworthy and responsible, who will act in the company’s best interests at all times.

When a company power of attorney is limited or otherwise restricted to a specific area or responsibility, it is also important to make this clear in the document and clear to the person who will have the additional legal powers. This helps minimise the risk that the person acts outside their legal authority. 

You should draft your company power of attorney in detail, given the significance of the legal powers which the document grants a person. 

Key Takeaways

A company power of attorney is a legal document used to give an individual certain legal powers to act on behalf of a business. For example, a power of attorney can enable someone to act on the company’s behalf during a property sale or negotiation, sign documents for the business, or more broadly act on its behalf in any matter. Given that these powers are quite significant, it is a serious undertaking, and you should carefully consider this appointment.

Companies usually opt to use company attorneys when a director absence risks slowing down business processes, like the authorisation or execution of documents. Company powers of attorney are also useful for more specific purposes depending on the situations. Generally, they can be quite flexible. However, it is vital to carefully consider who you appoint through a company power of attorney, as their decisions will bind the company. 

If you want to know more about creating a company power of attorney, feel free to call LegalVision’s business lawyers on 0800 005 570, or complete the form on this page.


What is a company power of attorney?

It is a legal document, used to give someone certain legal powers within the company. These powers often correlate with jobs done by directors, such as executing documents.

Are there limitations on company powers of attorney?

No, companies can generally create whatever kind of power of attorney they would like. This means that powers of attorney can either be specific, or general.

Should small companies consider creating a company power of attorney?

Small companies and start-ups are often good candidates for creating a company power of attorney. If you have one or two directors, and one of them is unavailable, this can slow down important business processes. Appointing a company attorney can mean that a director absence is less impactful on a small company.

Can you give a company attorney authority to negotiate on behalf of the company?

Yes, depending on how the company power of authority is drafted. It needs to be clear that the person has legal authority in the negotiation in question, or otherwise that they have the general authority to act on behalf of the company.

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