A company power of attorney is where the company appoints another person to act on its behalf. The person the company appoints is called an ‘attorney’.
The company empowers the attorney via a company power of attorney. The company power of attorney allows the attorney to:
This is important if the company directors are missing.
The company must urgently sign a document. Where is the director? The director is sick, dead, suffering from dementia or overseas.
Thankfully, via Company POA the company had appointed an ‘attorney’. This is to sign legal documents on behalf of the company. This is called a Company Power of Attorney.
A company POA is different to a human POA.
A company can not make an Enduring POA or a Lifestyle POA. Likewise, a human can not make a Company POA.
Companys sign Company Powers of Attorneys. The company is appointing a human or another company to act as its attorney. The attorney now:
The person the company appoints is called an ‘attorney’. Our Company POA is flexible. The company appoints:
The Corporate POA provides:
This is especially if the director is missing.
Problem: A company acts through its directors. Directors sign documents and make decisions for the company. What if the director is missing, sick or unable to act? The company loses its ability to act. Without a functioning director, a company is a ship without a rudder.
Solution: The company, itself, appoints an attorney. This is via a company power of attorney. Under the corporate POA, the attorney has the power to do and sign things for the company. This includes signing documents and making company decisions.
What happens if the director suffers death? Illness? Travel? Mental incapacity? Bankruptcy? Who looks after the company when the director is missing?
A Company Power of Attorney ensures your company continues to operate.
Does your company have two or more directors? Under the Corporations Act, at least two people sign all deeds. This is either two directors, or a director and a secretary.
Problem: Two directors: but one is missing. On the day of signing, you suffer a car accident.
Solution: The company appoints a person – an attorney. This is via a Company POA. Under the Company POA, that person signs the Deed.
For asset protection, most companies only have one director. If you have one director, then you only need that one director to sign Deeds. However, if you have two or more directors then you need two directors to sign all deeds.
Self-Managed Superannuation funds require all members to be trustees. And when the SMSF has a company as a trustee then all members must be directors of that corporate trustee. Therefore, many SMSF’s have two directors. Such SMSFs must have both directors sign. What happens if your spouse dies? You can not get your money out of a fund manager.
Two directors? Then the Corporations Law requires:
to sign Deeds.
If one director loses capacity or is unavailable, the company is unable to sign documents and enter into agreements. Corporate POAs fix this.
Example: Your Self-Managed Superannuation Fund has two members: mum and dad. The trustee of the SMSF is a company. The directors of the company are mum and dad. Mum dies. Mum has given a human POA to her son, Johnny.
Some fund managers, especially for Self-Managed Super Funds, require both directors to sign to release monies.
The Company POA outlives the directors. A Company POA only stops working when the company, itself, dies.
An Australian company has legal capacity. A company is a person. (Sure, an unnatural person, but a person nonetheless.) As such, under the Corporations Act, a company is allowed to appoint an attorney. It is not necessary to have a specific power in the Company Constitution.
Our Corporate POA is drafted so that it does not matter the company constitution is silent on delegated authority.
The attorney can human or even another company.
There are company POAs. And there are human POAs (enduring and medical). Each State and Territory has its own set of documents for human POAs.)
An individual power of attorney gives your attorney legal authority to manage your assets and financial affairs when the individual is unable to do so. This is for illness, accident and absence. A company power of attorney authorises a person or persons to act on behalf of a company and or sign certain documents on its behalf.
A ‘human’ POA does not work. No, a key reason why company powers of attorneys are so important is that an individual power of attorney is not a substitute for a company power of attorney. Even if you have granted a power of attorney to someone to manage your financial affairs, this does not extend to your company and the attorney cannot sign documents on your behalf in your capacity as director of a company.
A company power of attorney is granted to a person or persons. The company power of attorney is unique to the company.
No. A human power of attorney is not a substitute for a Company Power of Attorney. A Company POA is completely different.
Neither an Enduring nor a Medical POA can be used to act for a company. Instead, you need a Company Power of Attorney.
Even if you, as a human being, have granted a power of attorney to someone to manage your financial affairs, this does not extend to your company. An attorney under an Enduring POA cannot sign documents on your behalf, in your capacity as director of a company.
The person you appoint (attorney) is:
Choose trusted family members and friends. Consider your accountant, financial adviser or lawyer.
A director remains liable for an attorney’s actions. To reduce liability and promote accountability, the company may want to consider appointing two persons to act jointly, acting as a check and balance to each other. Again, it is important to think about who is suitable for the role of Attorney to avoid issues.
A Will is not a substitute for a Company Power of Attorney. This is because a Will only operates after a person dies. What happens while the executor administers the estate? A Company Power of Attorney ensures the continued operation of the company. This is after the director’s death.
No. If you are available and capable, you still have the authority to act for your company while a director.
A Company Power of Attorney must:
For help building your Company POA telephone us.
Adj Professor, Dr Brett Davies, CTA, AIAMA, BJuris, LLB, LLM, MBA, SJD
Legal Consolidated Barristers and Solicitors
After hours: 0477 796 959
National: 1800 141 612
Email: [email protected]