In light of COVID-19, the practical aspects of executing documents remotely have come to the fore. With powers of attorney, a company can designate a person to execute documents on its behalf. This article provides an overview of the use of ordinary powers in a commercial context.
What is a common power of attorney?
An ordinary power of attorney (a “PoA“) is a formal appointment by a party (the”principal“) in favor of another party (the”Lawyer“) and gives the lawyer the authority to act on behalf of the client.
What can we use it for?
In a commercial context, PoAs are most commonly used by a principal (an individual or a corporation) to authorize the attorney to execute documents related to a particular transaction. The PoA can specify exactly which documents the attorney is authorized to, or it can give general authority to carry out anything that is required in connection with a transaction or in general. For example, a company could give their attorney a PoA to execute documents on their behalf.
What are the requirements for a company?
A PoA must be carried out by certificate. For a company, this means that either (i) a director and a witness, (ii) two directors, or (iii) a director and the company secretary must be able to execute the PoA.
The company’s articles of association should be reviewed to ensure that there can be a PoA. Entry into the PoA should be properly reviewed, approved and logged in the usual manner at the board level. The PoA should then be executed as a charter on behalf of the company in accordance with the corporate constitution and the provisions of the Companies Act 2006.
What are the limitations?
A director cannot delegate his responsibility to act as a director or to attend board meetings to an attorney. Instead, a director should consider appointing an assistant director, who in turn is governed by the company’s articles of association.
Likewise, a single director cannot appoint a lawyer to act on behalf of a company. Instead, the client has to be the company itself.
How can Gowling help WLG?
Please contact us if you have any thoughts on how to ensure that your company can continue to execute important documents during this difficult time, and especially if you would like to discuss the appointment of a third party attorney to execute documents on behalf of the company.
Can we use electronic signatures?
In many cases it may be appropriate to execute documents electronically. For more information on electronic signatures, see:
Electronic signatures are valid: what’s the catch with financial transactions?
Understand electronic signatures
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