Powers of Attorney: UK – Registered Companies
Posted: 5th May 2014
Companies incorporated in the UK are free to confer authority upon any person, professional or entity of their choice by power of attorney. Companies’ articles of association almost invariably enshrine the principle that directors may delegate their functions by power of attorney. This position is supplemented in the most part by the Companies Act 2006, which sets out the mechanism through which powers of attorney may be granted.
What advantage is there to companies in granting powers of attorney? The answer lies in convenience, expertise and flexibility. Convenience: delegation affords directors the opportunity to focus their time where it is required most. Expertise: where the need arises to engage specialist service providers, such as financial, technical or legal experts, a power of attorney is an effective instrument of appointment. Flexibility: powers of attorney do not have to be used straight-away or even at all, but can be put in place as a precautionary measure.
Notaries in London possess a sound understanding of the legal formalities related to the execution of company powers of attorney. In certifying this type of power of attorney a London Notary Public will guarantee that it has been signed by the appropriate legal representatives and that it is a validly granted and binding document. This provides the recipient of the power of attorney the benefit of legal certainty.
How do UK-registered companies grant powers of attorney?
The Companies Act 2006 offers companies any of the following methods of execution: (i) under common seal; (ii) by the joint signature of two authorised signatories, in other words two directors or a director and company secretary (should there be one); or (iii) by the signature of a director and an attesting witness. The long-standing legal provision for powers of attorney to be “delivered” is still present in the Company Act 2006. Delivery in this context refers to the intention by companies to be bound to the terms of the power of attorney at hand. Additionally, and this requirement is rooted in the Law of Property (Miscellaneous Provisions) Act 1989, powers of attorney must be expressed to be deeds. Quite simply, this means that powers of attorney must be labelled as such or at least contain the word “deed”.
Notaries in London frequently have expertise in other legal systems’ requirements in connection with the grant of company powers of attorney. For example, a power of attorney to sell company property located in Spain would be prepared by a Notary Public in such a way as to fulfil the provisions of both English and Spanish law. This approach attempts to ensure that company powers of attorney can be upheld in the English courts as well as the courts in the jurisdiction where they will be used.
In addition to their services in ensuring and certifying the valid execution of powers of attorney by UK-registered companies, London Notaries may be able to provide advice and assistance at the other end of the spectrum, namely the revocation of company powers of attorney.