When an agent is appointed to make decisions and act upon on behalf of the principal within a legal framework, the formal documentation is known as a power of attorney. It can be helpful, especially to older people, to release the pressure upon them.
What Is A Power Of Attorney In Business?
Among the different types of power of attorney (General Power Of Attorney, Limited Power Of Attorney, Durable Power Of Attorney, Financial Power Of Attorney, Medical Power Of Attorney, Real Estate Power Of Attorney, and Springing Power Of Attorney), the business power of attorney falls under the category of financial Power of Attorney and designates the ones who are appointed for the older people in most cases and become effective upon the business owner’s incapacity to make decisions on behalf of the business owner.
Furthermore, with the legal document, you can ensure that your agent follows your preferences accordingly.
Why Do You Need A Business Power Of Attorney?
Generally, a business power of attorney is needed when the principal becomes too aged, gets in an accident, and has an untimely mental illness due to which the owner cannot take business-related decisions on their own. But you should be very clear about the responsibilities and authorities of your agent and when their decisions will be obligatory. They have limitations on responsibilities based on your needs. Moreover, your power of attorney can be :
- a friend,
- an organization,
- a relative or
- a lawyer.
You must keep in mind while choosing a power of attorney that :
- They are willing to take the authority.
- They are trusted and detailed.
- Communicative
- Understandable
- Matured
- Confident
- Resilient
- And last but not least, they must be sincere towards their duties.
A business power of attorney lets you follow your finance and business preferences through an agent if you are unable to do it yourself.
How to get a Business Power Of Attorney?
As this is a legal procedure, you should follow the laws applicable in your state when it comes to getting a business power of attorney.
Prepping to Get a Business Power of Attorney
In the preparation stage, you need to:
Decide if you need a business power of attorney
If you think at some point you may become seriously ill or injured, you can think about getting a business power of attorney, who will direct your business and company according to your will.
Your agent will have the right to hire and fire your business manager or worker, read your business records if you allow them to know the full history, visit you frequently regarding business, come up with great strategies to manage your business, make payments, pay bills and make decisions not specified in your living will. They can even appear in court to ensure your business profits and purposes are fulfilled.
You can opt for a living will that specifies how you want your business to be run and taken care of.
Select your agent
Follow the below criteria before you lock your agent. The agent should:
- Be someone whose judgment you trust.
- Live near you so they can visit you anytime.
- Be able to stand firmly by their decision even when your family members may disagree.
Chat with probable agents
Once you have a list of who could be the agent of your business power of attorney, have a chat with them. Ask them if they would be okay with this role.
Consult your lawyer
Talk to your lawyer, who will help you walk through various business issues and give you honest suggestions. This will give you a clearer and bigger picture so that you can make a better decision.
The lawyer can help you draft a living will and a business power of attorney.
Drawing a Business Power of Attorney
In the next phase, you must do the following:
- Look for forms
There is business power of attorney forms available online. Check the Department of Business Services website in your state for a template, or fill out a customized one and consult your lawyer.
- Fill in the relevant forms
Fill in your and your agent’s details in the desired form. Remember to select only one agent.
Pay close attention to the instructions, and think before you fill in these parts. This involves making critical decisions like selling out your company, appointing new employees, planning for your business succession, withdrawing or creating an account, making transactions, etc.
- Attestation by witnesses
Sign the form in front of witnesses who will verify that you did so in the right state of mind. Some states don’t allow your close ones to sign as a witness. Others don’t permit people to serve as a witness who will benefit financially in the event of your death.
- Notarization
Get the signed form notarized to make it legal. Remember to carry your ID before you head over to the notary office.
- Distribution
Make copies of your business power of attorney and distribute them among:
- Your primary caretaker.
- Your agent.
- Your family and friends.
- Your lawyer.
- The admin of your apartment, business manager, or the company.
- Update information
If your agent dies or doesn’t want to be your agent anymore, either fill in a new form or add an addendum to the current one. Make sure to have the updated part signed in front of witnesses and notarized.
- Store it
Keep a copy of your business power of attorney in a secure location at home. If you live in an area where there is a lot of humidity or rain, you might wish to laminate the form to keep it dry.
Conclusion
Accidents can have life-changing consequences in our lives. We have no way of predicting or avoiding them. And thus, we allow someone to take over the responsibilities of our property, business, company, organization, or even real estate if we can’t fulfill them ourselves. You must let your agent know about your financial goals.
Getting a business power of attorney can help us get our desired wishes to become a reality in our old age or even in some illness. The procedures may vary from state to state, but the purpose of an agent is almost the same, which attracts the principal most and allows them to believe in people.
