Understanding power of attorney ordinance is extremely important for a Hong Kong business owner. For the purpose of maintaining and running his business smoothly, this guide is a must you should read.
What is Power of Attorney Ordinance?
A power of attorney is a legal document that allows a person “Principal” to authorize another person “Attorney” to act on his behalf. This legal document is common in many cases from personal matters to running a business.
Types of Power of Attorney in Hong Kong
There are several types of power of attorney ordinance that business owners might consider:
General Power of Attorney: This form gives the attorney general powers to handle all or most of the business concerns. The attorney may act on behalf of the principal in business transactions, sign contracts, and make decisions in their absence.
Special Power of Attorney: It grants the authority to perform specific tasks such as handling a particular legal matter or managing a certain asset. For example, a business owner may grant a special POA to somebody to handle a business transaction for them.
Durable Power of Attorney: Unlike regular POAs, this type remains in effect even in the instance of the principal becoming incapacitated. It can be especially helpful for business owners who want to make sure their business continues to run smoothly in case of illness or injury.
Springing Power of Attorney: This POA takes effect in the event of a particular occurrence, such as the incapacity of the principal. This gives business owners protection against the unexpected.
Legal Requirements for Power of Attorney in Hong Kong
Under the said law Hong Kong maintains specific legal requirements for obtaining a valid power of attorney ordinance:
Writing and Signing: Principal must write and sign POA. If this document is produced by an operator outside of Hong Kong Such documents, it must be notarized or authenticated according to local law.
Witness: Some types of POA, such as transactions involving property. A notary public or other authorized person need to notarize documents.
Registration: While not all POAs are necessary to do registration, some types, especially those related to property, are necessary.
Revocation: Principals can revoke a power of attorney at any time if they have the necessary mental capacity to do so. To avoid misuse, this should be in writing and registered as appropriate.
How to Set Up a Power of Attorney for Your Business
Setting up a Power of Attorney in Hong Kong involves several key steps:
Choose the Right Attorney: It is crucial to select a trustworthy individual who will act in the best interests of your business. This could be a colleague, a partner, a lawyer.
Draft the POA: You can draft the POA yourself, using templates available online, or consult a legal professional. A lawyer can also help you navigate the legal requirements under the Power of Attorney Ordinance.
Scope: Clearly state the powers you want to give, whether general or specific. Be as specific as possible to avoid confusion.
Sign and Witness: Ensure the document is properly signed and witnessed according to legal requirements.
Store the Document: Keep the original POA in a safe place and provide a copy to your attorney. If necessary, register the document with relevant authorities.
Conclusion
To business owners in Hong Kong, the Power of Attorney is an important tool for continuity and flexibility in conducting business. Whether it’s entrusting authority to a trustable individual or making necessary arrangements in case of an unlucky event, it is extremely important to understand the Power of Attorney Ordinance for proper protection of business interests.
In either case, if you need more assistance in drafting a POA or with the requirements of the law, you can simply contact Fastlane HR.