Is A Power of Attorney Required for Your Business?

As a business owner, it is tough to think of losing control over any decision, much less on every facet of your day-to-day operations and long-term business strategy. However, for many business owners, there may come a time when this becomes necessary. So, how do you get yourself ready for such circumstances? Why is business power of attorney required?

Some people sell their business when they are still in complete control of their situation. Their business is their retirement plan, and they spend their working lives constructing something they can sell when the time comes. Others continue their business till the end. Because their business is their life, and they can’t imagine doing anything else, they rely on their estate plan to handle ownership and control transfers.

However, there is a gap that must be filled in both instances: What happens to the business if something happens before you’re fully prepared?

What is a Business Power of Attorney?

Such documents or forms can be useful in various situations, and those interested in granting power of attorney to a business associate can speak with a lawyer about the requirements.

A power of attorney (often known as a “durable power of attorney”) can be quite explicit in terms of the agent’s authority, and it might include language making it effective only under a specific event (for example, the business owner’s incapacity). You should be absolutely sure that your business power of attorney is crystal clear in both of these areas as a business owner. You don’t want your agent claiming to make decisions they are not permitted to make, and you don’t want any doubt whether the agent’s decision is final.

What if You Don’t Have a Power of Attorney?

Assume a person has no power of attorney and falls into a coma as a result of his surgery. No one is capable of instantly taking over his business and other financial issues. To designate a conservator, his relatives will have to go to court. Even though they may have selected the brother as the conservator, the court may not agree to that decision.

How Can You Make a Power of Attorney?

You’ll have to notarize your POA by signing it in front of a notary. Some states also require you to sign in front of one or more witnesses. You should file a copy of a POA with your county recorder’s office if your agent will be dealing with your business.

In a Power of Attorney, Who Can Act As an Agent?

Your fiduciary is your agent. This term denotes that they must behave in your best interests and in good faith. Keep correct records, keep your property separate from your agent, and avoid conflicts of interest. You have the right to sue your agent for abusing their POA. Obtaining a court judgment against an agent, on the other hand, can take years. It may also be unrecoverable if no money or other assets are available.

Will I be Held Liable for My Company’s Power of Attorney’s Actions?

Keep in Touch with Your Designated Agent on a Regular Basis

A POA is Not The Same As a Will

Final Thoughts

--

--

The Enterprise Diary is distinctively focuses on five major industries i.e Technology, Healthcare, Finance, Manufacturing and Consulting.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
The Enterprise World Magazine

The Enterprise World, is a business magazine, a platform for all the master business minds to share their stories of success. https://www.theenterpriseworld.com