Types of Powers Given to an Attorney

It is important to be aware that for present purposes, the type of powers of attorney being considered are those which are to be used in connection with commercial transactions or arrangements (but not functions of a personal nature). These are termed “ordinary” powers of attorney. For example, a sole trader running a business might wish to appoint another individual as the sole trader’s attorney to sign a commercial contract for purchase of goods on behalf of the sole trader or to manage their property or business affairs, or a company might wish to appoint an attorney to sign a contract under which the company buys shares in another company. 

These situations are distinct from the situation where the appointor (i.e. the person granting the power of attorney) is a private individual who appoints an attorney to carry out certain types of personal tasks for the appointor with the intention that they continue to do so after the appointor loses the necessary mental capacity. In such cases, the document needed will be a Lasting Power of Attorney (“LPA”). For example, where the appointor wishes to give authority to make decisions or act in relation to the appointor’s medical, health, welfare, personal property or financial affairs, and to be able to do so after the appointor loses mental capacity to do so themselves, it is necessary to use a document that meets the requirements for an LPA prescribed by the Mental Capacity Act 2005. Typically, the attorney appointed for that purpose will be a younger family member. Such LPAs are intended to have a lasting or enduring effect and have to be registered with the Court of Protection before they can be used.