Naming a power of authority for your business is a healthy start to maintaining its professional health in the long term. It may not seem necessary at first. However, in the near future you may run into problems where you will need the help of one.
A power of authority, sometimes also called power of attorney (POA), refers to a legal authorization that provides an appointed person the power to act for someone else. The POA gives the person the authority to act on behalf of the company. The appointed may be given broad or limited authority to make decisions about the company’s properties, finances, investments, or medical care. Either way, the appointed POA can have general or limited powers.
How does a power of authority work?
It involves not just the appointed power of authority but also involves a legal document too. In the event the company’s owners are temporarily or permanently ill or disabled, the power of authority will step in to represent them. The owners of the company will need to choose someone who they can really trust to handle the company’s affairs for them.
You can obtain the documents via a lawyer. Both the company owners and the power of attorney must sign the paperwork. A third party is usually needed to witness it.
Most powers of attorney documents authorizes the appointed to represent the company in all property and financial issues as long as the company owners’ mental state of mind is healthy. Once the company owners become incapable of making decisions for themselves, the agreement between both party ends.
The power of authority can end for several reasons. The reasons can be due to:
- The company owners revoke the agreement
- The company owners have passed away
- When a court invalidates it
- When the appointed can no longer carry out the responsibilities as agreed
In short: a power of authority is appointed when the company owners are impossible to reach during dire times. In those cases, the power of authority can be considered as the situation differs and calls for it.
When is a power of authority appointed: considerations?
There are a few reasons to appoint a power of authority. It ensures that someone will look after your company’s affairs when you become incapacitated. You can and should choose a trusted family member, a proven friend, or a reputable and honest professional.
You should always keep in mind, however, that signing a power of authority will grant the appointed broad authority. It’s similar to signing a blank cheque. Make sure to choose wisely before signing the legal document.
How do you appoint a power of authority?
You will first need to find a lawyer to help you set up a power of authority. They will get your to fill in a sign several documents. A POA must be registered at the Power of Attorney Registration Office, High Court of Malaya, Kuala Lumpur, or High Court Registration Office through Peninsular Malaysia.
You will need the following items:
- A copy of the original POA (for safe keeping)
- A duplicate of the original copy of the POA for the court
- Identification documents of the company owners and the appointed (if requested)
You will then sign the POA in the presence of a witness, which usually are in the following:
- Justice of the Peace
- Land Administrator
- Notary public
- Commissioner for Oaths
- Advocate and solicitor
If you are outside of Malaysia:
- Notary public
- Commissioner for Oaths
- Any consular office of Malaysia
There are no specific formats to be followed as in the Powers of Attorney Act 1949. However, there must be some kind of authentication by the people above to be enclosed in the POA document. Authentication must be in the form prescribed in the Powers of Attorney Act 1949:
- Form I – Authentication Form for Individual Donor
- Form II – Authentication Form for Company or Corporation Donor
Naming a person with the power of authority to your company will be one of the most important decisions you will ever make. Make sure that you have chosen someone you can really trust.
If you need help with the power of authorization appointment, feel free to reach out to us. We will be more than happy to assist you with your every decision in appointing one.