A Corporate Power of Attorney or Company Power of Attorney (CPOA) is a legal document that appoints and delegates an individual or a trustee organisation with the legal authority to act on behalf of the director on legal and/or financial matters. The person or organisation that is nominated is referred to as the “attorney” and under s124 of the Corporations Act 2001 (Cth), companies are well within their legal rights to appoint an attorney they believe to be suitable.
What Exactly Can an Attorney Do Under a CPOA?
Once an attorney has been legally appointed, they are then able to act on your and company’s behalf in any specified legal and/or financial matters, this may include:
- Sign off on documents such as but not limited to leases, contracts, tax returns and property purchases
- Perform company tasks
- Cancel shares in the company
Eligibility Criteria to Select your Attorney
The only legal criteria that needs to be met is that the elected attorney must be 18 years or older. Once that has been met, think about who is best suited for this role and will understand and execute the responsibilities thoroughly. If you are unsure about who to elect, you may also consider a company instead of an individual. The NSW Trustee & Guardianship can also be elected as your attorney or as a substitute attorney.
What Powers Can be Allocated to an Attorney?
Enacting a CPOA does not mean you will completely lose the power you have, the CPOA can be structured to provide the attorney with certain types of power such as:
- Power for a specific/limited purpose: the attorney will only be endowed with power for a very specific purpose, such as signing off on documents, and cannot act outside of this limited purpose.
- Power as contingency: only in the situation a director is unavailable or incapcitated, will the attorney be delegated general powers to act on their behalf but this does not mean they take over as the director.
It is crucial that you communicate to the authorised attorney their responsibilities and duties, so they are aware of any limitations and can perform their obligations within the legal framework.
Benefits of a Corporate Power of Attorney
- In the event a director is unavailable or incacpicated, the company’s function will not be halted but will continue as normal under the elected attorney.
- Allows for the director to focus their attentions to other tasks while delegating minor tasks,such as signing off on an abundance of documents, to the attorney.
- In the case of a director’s death, an attorney can operate until the legal executor is lawfully allowed to operate.
- So long as you have the required mental capacity, you can terminate a CPOA at any time.
How to Write Up a CPOA?
- Carefully deliberate and select the attorney of your choosing.
- Enlist the help of a legal professional to draft the CPOA with all the expectations, conditions and limitations on the powers to be delegated.
- Sign the CPOA in presence of a legal witness, this can be a legal solicitor or barrister, licensed conveyancer; Registrar of a Local Court or a NSW Trustee and Guardianship employee.
If you would like further information or advice on enacting a CPOA, please reach out to us through the contact form or by calling us on 1300 377 997.