A company power of attorney is a legal document made by a company that authorises a person (the “attorney”) to act on its behalf and/or sign certain documents on its behalf.

1.    Do you need a Company Power of Attorney?

By far the most common reason for a company to issue a company power of attorney is if one of the directors, who would usually sign documents on behalf of the company, is unavailable. For example, if the director is on holiday or away on business, particularly if the director is overseas and difficult to contact. This is particularly important for companies with only one director where the director is also the CEO or Managing Director, and is therefore primarily responsible for driving the business forward. If that person is unavailable, then the company may be unable to conduct its usual business (such as entering into agreements, signing documents etc…). No business should completely shut down just because one of its key people is away!

2.   Can your Company Lawfully Appoint an Attorney?

Section 124 of the Corporations Act grants companies the legal capacity and powers of an individual both in and outside the jurisdiction of Australia. A company is therefore authorised to appoint an attorney or an agent (this can be another company or an individual) on such terms as determined by the company.

3.   Who should you appoint as the Company’s Attorney?

If a director will not be available to sign on behalf of the company it is thus possible for an attorney to be appointed, allowing the business of the company to be continued. Care should be taken in selecting the person to be appointed as an attorney and in determining the period of their appointment. Delegating authority to a person who does not otherwise have that authority should always be documented in a company power of attorney (or similar document) and the limits of the power should be clearly communicated to the attorney so they understand what they can and can’t do. This should minimise the risk of the attorney acting outside their authority.

Conclusion

Appointing an attorney for your company is a serious undertaking, so it’s a good idea to make sure you document the appointment properly.

Lachlan McKnight
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