Understanding Power of Attorney

A power of attorney is a very effective legal instrument that provides safety and stability to the business transactions of an establishment. It also covers directions to handle an emergency medical situation, financial and personal obligations as well as other legal matters. Here we draw attention to the importance and potential of a power of attorney as a useful legal instrument that supports businesses.

Many situations in life require sudden decisions to be made. So, even though it may be difficult to consider such situations, it has to be deliberated as it greatly affects your financial security and also of your dependents. What this means is that that better to be safe than sorry. Therefore, it would be prudent to plan ahead with regard to matters like preparing a will and taking an insurance policy. A ‘Power of Attorney’ which states clearly who takes the decisions on your behalf in case you become injured or disabled is another important matter to consider.

It is not only a necessity in personal life but also for business. In the UAE, given its development as a popular international business hub and the huge number of dealings that take place here, having a power of attorney has become very much significant. It one of the most trusted documents while setting set up a business establishment there. This invaluable legal instrument helps to manage the business from any part the world and is extremely advantageous not only in terms of its practicality but also in terms of the peace of mind it provides.

Let’s discuss the essential queries associated with getting a power of attorney for your specific requirements in the UAE.

Why do You Need a Power of Attorney?

A power of attorney is a legal document which has to be signed before a Notary Public. Using this document, a person, gives another individual, the right to perform legal transactions as his/her agent. The agent will have the permission to provisionally manage your dealings in your absence or in case you become physically, mentally compromised, incapacitated or find yourself in a situation where you are unable to act for yourself as you normally would.

As per the law in UAE your agent has to be of sound mind. and over the age of 21 years. It depends on the scope of your power of attorney, to decide who the agent can be, a business partner, relative, employee, friend, or even your lawyer.

A power of attorney is a tremendously potent legal record. For getting the benefit from this, it is essential that the agent you choose is a trusted person, who you can be confident, will always protect your best interests.

Understanding the Different Types of Power of Attorney

Based on the scope of power intended, an entity can apply for any one of the two types of power of attorneys authorized by the government in the UAE. The two types of power of attorney are described below

General Power of Attorney

This is the most wide-ranging type of authorization which allows the person appointed as agent to conduct almost all kinds of transactions or dealings on behalf of the primary person known in legal terms as the principal. The responsibilities of the agent include but are not restricted to, standing in for the principal before the ministries, government departments, in all legal issues, in real estate dealings, and with utility and telecom service providers, settling bills and claims, signing documents and contracts etc.
The validity of a general power of attorney ceases as soon as the principal dies, becomes disabled or when the power of attorney is rescinded.

Limited Power of Attorney

This type of power of attorney is also called a Special Power of Attorney, this is limited to specific legal acts or one-time transactions. The limited power of attorney stipulates the very specifically, all the transactions that an agent is authorized to commence on behalf of the principal. Limited power of attorney usually covers sale or purchase of shares, vehicles, real estate or legal entities. In all cases, the details of the entire transaction need to be recorded and documented properly.

The Process of Arranging a Power of Attorney in the UAE

Notably different power of attorneys may have additional or different requirements based on the purpose it is meant to serve. A limited power of attorney for the sale of a vehicle, for example, will require the car registration papers to be submitted at the time of attestation.

The law in UAE necessitates that the power of attorney is written in Arabic with a translation in English, which has to also be prepared, for the convenience of non-Arabs. The documentation has to be notarized and three copies of the document are signed at the office of the Notary Public. Two copies in all are given back to the principal while one is kept with the notary public for the purpose of certifying and record-keeping.

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Originally posted 2021-09-29 04:31:07.