Today, our focus is on Corporate Power of Attorneys, which are critical elements in our business and personal lives.
If you are a company director, you would be aware that signing documents on behalf of the company is generally the sole responsibility of company directors. But what if, for example, a company's sole director becomes unwell or dies?
Corporate Power of Attorneys are particularly significant in scenarios where:
There's no husband-and-wife director relationship.
Two non-family-related directors exist.
One director is incapacitated or passes away, especially in sole director setups.
Without a Corporate Power of Attorney, the company is essentially "like a chook without a head," impacting everything from bank accounts to ASIC forms and leaving it unable to operate, manage, or move forward.
If you wish to appoint or replace a director, you must sign as the current director. This can be problematic if you are incapacitated or deceased, particularly if:
Measures are not in place.
Probate is required before any actions can be taken.
A Corporate Power of Attorney can mitigate the delays in administration and decision-making by:
Allowing a nominated person to take over affairs if you are incapacitated.
Addressing corporate matters, which enduring Power of Attorney does not manage.
Not having a Corporate Power of Attorney can halt business operations for a sole director running a business or for directors who do not want the other to take over. It can prevent access to bank accounts and necessary information and stop decisions regarding debtors, creditors, and sales.
We highly recommend considering a Corporate Power of Attorney. We are evaluating it ourselves. From a risk assessment standpoint, this measure is highly important. It ensures you retain control over the business you've worked hard to build, even in unforeseen circumstances.
Ultimately, having the right mechanisms in place is crucial. A Will is not always sufficient for these situations, and more information will be provided soon. We're currently running tests on the process to ensure clarity and efficiency and wanted to give you a heads-up.
Comments