POA / Appointment / Authority Letter

These documents relate to Corporate appointing POA/appointee. Please refer to the Business section for individual appointment documents.

A. Power of Attorney

 A Power of Attorney (POA) is a document that allows you to appoint a person or organization to manage your affairs if you become unable to do so. An instrument creating a Power of Attorney must be executed as a Deed. Strictly, a Power of Attorney (as opposed to the less formal appointment of an agent) is only required where the Attorney is to execute a deed on behalf of his appointor. Here are some common examples:

1. General Power of Attorney 

It gives broad powers to a person or organization (the Attorney) to act on behalf of the Principal. General Power of Attorney is an effective tool if the Principal needs someone to handle certain matters in a different jurisdiction, or when the Principal is physically or mentally incapable of managing their own affairs. 

2. Special Power of Attorney

The Attorney is given specific powers to act on behalf of the Principal. This is often used when one cannot handle certain affairs due to other commitments.

3. Execution of a Power of Attorney by Companies

Where execution by a company under its common seal is adopted, the common seal will normally be affixed to the deed in the presence of the company secretary and one director, or two directors, who attest to the sealing by countersigning the deed and describing themselves by their respective offices of ‘secretary’ and ‘director’ or ‘director’ and ‘director’. The company’s seal must be affixed in an authorised manner, so as to comply with its articles of association, which is why it is imperative to check these before having a deed executed by a company, as the requirements may be different from the common practice above. 

4. Common Seal

In most Common Law jurisdictions, companies are required to have a metallic seal on which their name must be engraved in legible characters. Before the common seal can be affixed to any document of the company, the seal must be first adopted by a board resolution. In certain jurisdictions, the signature of two directors (or one director and the company secretary) is insufficient to execute a deed without affixing the common seal. 

Standard articles of association prescribe that the seal may only be used with the authority of the directors or of a committee of directors authorised by the directors, and any document to which it is affixed must be signed by a director and countersigned by the secretary, or other directors, or such other person appointed by the directors for such purpose.  In this regard, when directors sign a document to which the company’s seal has been attached, they sign as part of the process of attaching the company’s seal and not in the capacity of attesting witnesses. It is not necessary to affix a wax blob and impress the company’s seal into it (can use a large adhesive red wafer seal and stick it on the deed instead).

B. Duties under Power of Attorney

 1. Principal's duties

An Attorney is generally entitled to assume that a Power of Attorney has been validly granted. Where this turns out not to be the case, it appears that the Attorney will be entitled to indemnification from the Principal for the loss he suffers as a result. The Principal is also liable to indemnify the Attorney against expense and liability he incurs in performing acts under the power, except where the Attorney acts beyond his power, and his acts are not ratified by the Principal. 

A Power of Attorney often includes an undertaking by the Principal to ratify action taken by the Attorney under or purportedly under the power. The effect of such an undertaking is unclear. Action taken by the Attorney which is within the scope of his authority under the power will be binding on the Principal without any need for ratification. Acts outside the scope of that authority will not be binding. 

2. Attorney's duties

An Attorney owes various duties to his Principal:

• There is no obligation on an unpaid Attorney to act on the power appointing him. Once he does so, though, he must not go beyond its scope. He must not act once he knows the power has terminated. A paid Attorney is obliged to carry out the duties imposed and may be liable for failing to do so.
• A paid Attorney must exercise the skill, care, and diligence of a reasonable man and, where he undertakes his duties in the course of a profession, must display proper professional competence. An unpaid Attorney must use whatever skill he has (and any special skill he has held himself out as having), as well as apply the same care and skill he would apply to the conduct of his own affairs.
• An Attorney must not put himself in a position where the duty he owes his Principal conflicts with a duty he owes to another person. 
• The Attorney must account to his Principal for any profits he makes. 
• The Attorney must keep the Principal's money separate from his own, and anyone else's, money. He holds the Principal's money in trust.
• An Attorney can delegate his powers and duties only if he has either express or implied power to do so.
• The Attorney is obliged to keep his Principal's affairs confidential unless disclosure is authorised.

C. Appointment / Authorisation / Authority Letters

Appointment / Authorisation / Authority Letters are less formal documents than a Power of Attorney. Unlike a Power of Attorney, they do not need to be executed as a deed and thus fewer formalities are required in the execution. They are generally used to inform third parties that the person is properly authorised. The following table is a quick reference guide on the documents on DocPro:

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