What does power of attorney mean?
A power of attorney (PoA) is an instrument in writing empowering a specified person to act for and in the name of a person executing it. In other words, a power of attorney is an authorisation to act on someone else's behalf in a legal or business matter. The person authorising the other to act is the grantor/principal of the power and the one authorised to act is the attorney/agent. It is a unilateral document signed and executed only by the grantor or principal. A PoA may be revoked at the instance of the grantor or due to his death or incapacity. A PoA is usually construed very strictly. The PoA is frequently used in the event of a principal's illness or disability, or when the principal is out of the country and can't be present to sign necessary legal documents for financial transactions.
Why should one make a PoA? Who should one choose?
There are many reasons to make a PoA, as it ensures that someone will look after your financial affairs in case you are not available. You should choose a trusted family member, a proven friend or a honest professional with past reputation. However, one must remember that signing a power of attorney that grants broad authority to an agent is very much like signing a blank check — so make sure you choose wisely and understand the laws that apply to the document.
What are the types of PoA?
General purpose PoA: The PoA holder can perform all activities on behalf of the original holder(s)
Specific purpose PoA: The PoA holder can perform only certain operations. A power of attorney conferring on the agent the authority to act in a single transaction in the name of the principal is a Special Power of Attorney. If the power of attorney authorises the agent to act generally or in more than one transaction in the name of a principal, it is a General Power of Attorney. A single act or transaction is meant to imply either a single act or acts so related to each other as to form one judicial transaction. For example power of attorney for sale of a particular property.
How do you execute your PoA if you are within India/outside India?
The PoA should be signed and duly executed on a non-judicial stamp paper per prescribed stamp duty, if executed within India. The power of attorney should be duly signed by the person executing the same. It may be accepted by the person in whose favour it is drawn and should be duly attested by two witnesses. The power of attorney should be duly executed before and authenticated by a Notary Public, or any court, Judge, Magistrate, Indian Consul or Vice Consul or representative of the Central government. In case it is executed outside India, it should be on a plain paper without any stamp. The same is required to be stamped within three months after it is received in India by the Collector of Stamps.
