Skip to content

What to Consider When Creating a Company Power of Attorney

A company power of attorney is a legal document made by a company that authorises an individual to act and sign certain documents on its behalf. This individual is called an “attorney”. A company power of attorney can authorise the attorney to execute any documents referred to in the power of attorney. This could be particular types of documents or any documents determined by the attorney. This article will set out some key considerations when creating a company power of attorney and choosing who to appoint as your company’s attorney.

What is a Company Power of Attorney?

According to the law, a company has the capacity of a legal person and acts through its directors. This means, for example, that a company can enter into contracts just as a person can. Directors sign documents and make decisions on behalf of the company. However, if the directors cannot act on behalf of the company, the company cannot operate effectively. A company power of attorney involves the company’s directors appointing a person to act as the company’s attorney. That attorney will then have the power to do the things that the power of attorney authorises them to do. This may include executing documents (e.g. signing contracts) and making company decisions. Typically, a company power of attorney document will be utilised to handle financial matters on behalf of the company.

There are several questions to consider when creating a company power of attorney. They are:

  1. Do you need a company power of attorney?
  2. Can your company lawfully appoint an attorney?
  3. Who should you appoint as the company’s attorney?
Front page of publication
Directors' Duties Complete Guide

If you are a company director, complying with directors’ duties are core to adhering to corporate governance laws.
This guide will help you understand the directors’ duties that apply to you within the Australian corporate law framework.

Download Now

1. Do You Need a Company Power of Attorney?

The most common reason for a company to grant a power of attorney is if one or more of the directors, who would usually sign documents on behalf of the company, is unavailable. For example, if the director is away on holiday or business and is difficult to contact, the company may not be able to execute documents that rely on the director’s signature.

A company power of attorney may be particularly important in a small or startup company. For example, in companies with only one director, if that director is out of contact or loses the capacity to sign business documents, the business will come to a standstill if no one else is authorised to sign off on cheques or key documents affecting cash flow. For companies with two directors, corporation law requires two directors or a director and a secretary of the company to execute documents. This means if one director loses capacity or is unavailable, the company may be unable to sign documents and enter into agreements. A power of attorney can solve this problem.

2. Can your Company Lawfully Appoint an Attorney?

Corporations law grants companies the legal capacity and powers of an individual, both in Australia and overseas. A company is, therefore, authorised to appoint an attorney or an agent on terms determined by the company. The attorney or agent can be either another company or an individual.

3. Who Should You Appoint as the Company’s Attorney?

You should take care in choosing the right person or people to appoint as your company’s attorney. You will also need to determine the period of the attorney’s appointment and any limits on their authority. Delegating authority to a person who does not otherwise have that authority should always be well documented in a company power of attorney. In addition, you should always clearly communicate to the attorney the limits of their power so they understand what they can and cannot do. This should minimise the risk of the attorney acting outside of their authority.

Key Takeaways

A company power of attorney is a legal document where the company appoints another person (the attorney) to act on its behalf. It is important because it gives another person the power to carry out tasks for the company. This is important in situations when the company itself (by way of its directors) is unable. Appointing an attorney for your company is a serious undertaking. Therefore, ensure you obtain legal advice prior to creating a document. You should carefully consider who you wish to appoint as an attorney and make sure you document the appointment properly.

If you need help with your business structure, our experienced business 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 1300 544 755 or visit our membership page.

Register for our free webinars

ACCC Merger Reforms: Key Takeaways for Executives and Legal Counsel

Online
Understand how the ACCC’s merger reforms impact your legal strategy. Register for our free webinar.
Register Now

Ask an Employment Lawyer: Contracts, Performance and Navigating Dismissals

Online
Ask an employment lawyer your contract, performance and dismissal questions in our free webinar. Register today.
Register Now

Stop Chasing Unpaid Invoices: Payment Terms That Actually Work

Online
Stop chasing late payments with stronger terms and protections. Register for our free webinar.
Register Now

Managing Psychosocial Risks: Employer and Legal Counsel Responsibilities

Online
Protect your business by managing workplace psychosocial risks. Register for our free webinar.
Register Now
See more webinars >
George Turnbull

George Turnbull

Read all articles by George

About LegalVision

LegalVision is an innovative commercial law firm that provides businesses with affordable, unlimited and ongoing legal assistance through our membership. We operate in Australia, the United Kingdom and New Zealand.

Learn more

We’re an award-winning law firm

  • Award

    2025 Future of Legal Services Innovation Finalist - Legal Innovation Awards

  • Award

    2025 Employer of Choice - Australasian Lawyer

  • Award

    2024 Law Company of the Year Finalist - The Lawyer Awards

  • Award

    2024 Law Firm of the Year Finalist - Modern Law Private Client Awards

  • Award

    2022 Law Firm of the Year - Australasian Law Awards