Why Legal Authorizations & Powers of Attorney Need to Be Reviewed by a Lawyer?


Daily life and business require several procedures and dealings with governmental and official bodies. In light of the diversity of obligations and their different timings, impossibility of performing this number of tasks or duties due to personal business, large number of tasks or their different timings or since their insignificance compared to more important responsibilities, you may need someone to assist you, represent you, and act on your behalf before the concerned bodies to complete such procedures and transactions. This becomes a necessity when the person is outside the country or the territory where the procedure is intended to be carried out.

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The solution of this problem is to authorize others to carry out these works through issuing of power of attorney, authorization or board’s decision if they are to act on behalf of your company. These are called legal authorizations, as they are done either by authorizing someone to carry out tasks or procedures, whether paid or unpaid, according to the nature of the agreement between the parties.

Such legal authorizations may be in a form of authorization or decision of the company board of directors to authorize a director or partner to take an action,  to act in certain cases, or to represent the company in a given matter.

Authorization may be issued by an individual in his/her personality or capacity, such as a company manager, business owner, attorney of another person, etc. to another person in the form of a general or special power of attorney.

It is worth mentioning that in order to obtain authorization from individuals in their capacity, such individuals need to be authorized to authorize third parties in that capacity or by law. All such authorizations require attestation by a public official who is called \”Notary Public\”.

Therefore, you should hire an attorney to review your legal authorizations as a company and/or individual for the following reasons:


First: Understanding the Nature and Limits of Powers You Grant to Others as per a Legal Authorization

Legal authorizations granted to individuals or persons to complete all or some works on your behalf may include powers of attorney and authorizations that may exceed such works limits and extend to other powers in case of using a previously prepared or printed firm by a person who is not legally specialized.

This may lead to wrong dispositions on the part of powers of attorney or agents supposing that you have authorized them to use these powers. Moreover, such powers may be used in bad faith, the thing that may impose extra financial and legal obligations on you . Consequently, you cannot object thereto since such obligations have resulted in accordance with a legal authorization notarized by the notary public acknowledging the validity of authorization with such powers. The legal argument before the courts on the invalidity of such disposition becomes arduous and painstaking as such authorizations were given in accordance with proper authorization in a sound sequence. This issue arises in particular in the powers of attorney and authorizations concerned with securities, stock trading and stock market speculations.


Second: Completing of the Necessary Powers to Use the Legal Authorization

Drafting a legal authorization to use it for a given purpose shall be the intent of the person who issues the power of attorney or decision. Government authorities do not require verifying the validity or accuracy of the data contained in the power of attorney to complete this purpose, as the government authorities\’ role is to verify that the power of attorney was issued by the power and authority holder and meets the legal requirements.

Hence, the power of attorney may not be sufficient when used before another body or place due to the insufficiency of the required data to carry out the powers and tasks set out therein, for example, not specifying the territory or region in which the power of attorney is applicable or not granting the discretionary authority to the attorney in a given case, for example, authorizing an individual to establish a company without specifying the territory, the country of incorporation, the legal form of the company, or identifying the company name without authorizing the partner to change the name if it is revealed that it is a repeated name or prohibited as per the laws of the territory where the company is to be established.


Third: Completing the Formalities to Validate the Legal Authorization

The government official or the competent government authority concerned with validating legal authorizations may require certain formalities to be completed in order to approve the legal authorization, such as the use of the national ID number, even if the passport number and the nationality or address of the attorney and client are mentioned. Moreover, it may be necessary to mention the validity duration for any authorization or power of attorney.

 It should be noted that such formalities may change over time, hence, lawyers have the best opportunity to be aware of such procedures by the virtue of their daily life engagement in such procedures. This saves both time and effort when making formal adjustments and avoids being exposed to the probability of refusing to validate the legal authorization due to the insufficiency of the legal form required to validate the power of attorney.


Fourth: Reviewing the Source of the Authorization Authority Sequence and its Validity

Upon validating a power of attorney in your capacity as the company manager, you may be surprised that you cannot authorize this power due to restrictions contained in the memorandum of association or because you have not obtained authorization from other partners to delegate powers to other people.

It may be necessary to ensure if you may delegate powers to others in order not to be held accountable by the authorizer or the company in case if you delegated powers – which are not available to you- to others and such authorization has been approved by mistake by the notary public, the thing which makes you held accountable. Most importantly, you should be aware that the Notary Public\’s signature does not exempt you from being held accountable.

Moreover, in case if you signed transactions or procedures with are not within your authorized powers, this may personally put you at risk  and makes you held accountable in case if the company or the authorized refuses to bear responsibility under the pretext of not signing such transactions and procedures and the invalidity of your signature on them.

Legal authorizations need to be drafted and reviewed, especially concerning the powers that you grant to others and the extent of such powers in order to ensure being safe from assuming obligations you do not expect.

Hiring a competent lawyer shall help you to understand the powers and authorities you grant as per the general or special power of attorney or the board’s decision.

A lawyer can also help you in providing you with better drafting to ensure your rights and to identify the authorization scope, validity period and the attorney’s working mechanism. Moreover, hiring a lawyer also ensures easy execution of the works to be carried out, the sufficiency of the authorization data to ensure realizing and implementing intended targets of your business, as well as reviewing your actions based on a given power of attorney or authorization.

Thus, you will be investing in protecting yourself from the risk of future accountability

Contact us for Corporate lawyers in Dubai. In case if you have any suggestion to improve the article content or if you would like to contact us for additional information, you can contact the article writer via our e-mail.

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