In this article we take a look at what is a general power of attorney and how you can get one.
Power of Attorney as a concept refers to a document wherein one party allows another party to act on their behalf as their representative or proxy. Power of attorney is usually utilised when a person is not in a position to act on their own and entrusts someone else to handle their affairs on their behalf. There could be several reasons for this. A person may not be able to be physically present for a matter where physical presence is required. The person might be minor and cannot enter legal contracts alone. So when such circumstances arise, the unavailable or incompetent party can manifest a power of attorney to a person who is available and competent to act on behalf of them.
There can be two kinds of power of attorney. One is a general power of attorney where the person possessing this power can act on behalf of the person manifesting the power in all legal matters. The second is a specific power of attorney where the person authorised with a power of attorney can act on behalf of the person, emphasising only particular matters. In this article, we shall discuss the General Power of Attorney.
General Power Of Attorney
The general power of attorney(PoA) is a written authorisation to an organisation or person to act on their behalf in all legal matters. The powers granted by a general PoA include:
- Entering into contracts.
- Handling business transactions.
- Operating business interests.
- Employing professional help.
- Settling claims and making gifts.
The general PoA is an effective tool to be used while the person is out of the country, physically or mentally incapable of managing the affairs, or if the person is a minor.
A general PoA gives a person or organisation broad powers to act on your behalf. These powers include handling financial and business transactions, buying life insurance, settling claims, operating business interests, making gifts, and employing professional help. A general PoA (as opposed to a special PoA) is an effective tool if you will be out of the country and need someone to handle certain matters, or when you are physically or mentally incapable of managing your affairs. A general PoA is often included in an estate plan to make sure someone can handle financial matters.
It is essential for an agent to keep accurate records of all transactions done on your behalf and to provide you with periodic updates to keep you informed. If you cannot review updates, direct your agent to give an account to a third party. As for legal liability, an agent is held responsible only for intentional misconduct, not for unknowingly doing something wrong.
This protection is included in PoA documents to encourage people to accept agent responsibilities. Agents are not customarily compensated; most do it for free. Should you, a friend, or relative suspect wrongdoing on the part of your agent, report the suspected abuse to the police and consult a lawyer.
Procedure For Getting A General Poa
- First, the PoA has to be drafted. This is generally considered a very straightforward process and can be done by any lawyer. It need not be done on stamp paper but must be made in the presence of two witnesses and a notary public. When authenticated by a notary public, it has the same effect as registration.
- There is also no need to have the Power of Attorney registered at the sub-registrar’s office. However, this may be necessary when a power of attorney is being executed for property-related matters. In such cases, a power of attorney is called a ‘special power of attorney.
- In case the power of attorney has to be registered, it will have to follow the provisions laid down under Section 48 of Schedule 1 of the Indian Stamp Act, 1899. Stamp duty has to be paid compulsorily by the principal or donor in the jurisdictional registrar’s office. In case of a general power of attorney, stamp duty is Rs. 100.
Conclusion
A power of attorney can be of great convenience. But if not drafted carefully, it can make the person manifesting the power vulnerable to fraud and being blindsided. And while you may be clear about what you want to achieve through a power of attorney, only an expert in the field of contracts and agreements can ensure that you are protected against any loopholes by making a watertight power of attorney. If you have any specific queries concerning power of attorney or need help drafting one, then get in touch with us so that our legal experts can understand your requirements and assist you with your needs.
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