Power of Attorney PoA

A power of attorney lets one person act in another's name with legal effect. The person who grants it is usually called the principal. The person who receives it is the attorney, agent or representative. Acts carried out within the scope of the power bind the principal as if the principal had carried them out.

Suppose a founder who lives abroad is selling her shares in a company. She cannot attend the signing, so she authorises her lawyer to sign the share purchase agreement for her. The power names the lawyer, describes the transaction and states what the lawyer may sign. A power like this is specific. A general power covers a wider range of acts, so the people relying on it have more to read.

Companies use powers of attorney too. A company acts through its directors, and the directors can authorise an employee or an adviser to sign for it. How a power must be worded, how long it lasts and how it ends are questions for the national law that governs it.

Both people: the client and the person acting for the client. Article 20(1)(i) of the EU Anti-Money Laundering Regulation lists this among the customer due diligence measures. An obliged entity must be "verifying that any person purporting to act on behalf of the customer is so authorised and identify and verify their identity".

That sentence contains two separate duties. The first is to check the authority, which means reading the power of attorney and confirming that it covers what the representative is doing. The second is to identify the representative as a person. Article 22(1) requires the same identity information for the representative as for the customer: names, place and date of birth, nationalities and usual place of residence. Under Article 22(6), the identity is verified either from an identity document or through electronic identification at assurance level substantial or high and relevant qualified trust services under eIDAS.

The power of attorney does not replace due diligence on the principal. The client still has to be identified and verified under Article 20(1)(a). A doubt about the representative is itself a trigger. Article 19(1)(f) requires due diligence "when there are doubts as to whether the person they interact with is the customer or person authorised to act on behalf of the customer".

The regulation applies from 10 July 2027 (Article 90). Until then, the national laws that implement the EU anti-money laundering directives apply.

The firm reads the document against the act it is supposed to cover. The regulation says that the authority must be verified but not how, so the method comes from national law and from the firm's own procedures. Four questions cover the ground.

Who granted the power? The principal should be the client. Where the principal is a company, the person who signed for it must have been entitled to do so, which a company register extract or a board resolution can show.

Does the power cover this act? Authority to negotiate may not include authority to sign, and authority to sign one agreement does not extend to another.

Is the power still in force? Check the date, any expiry and whether the principal has withdrawn it. For an older power, a short written confirmation from the principal settles the point.

Is the power in the right form? National law may require a particular form, and a register or bank that receives the document may have requirements of its own.

The firm then keeps what it relied on. Article 77 requires a copy of the documents and information obtained in customer due diligence to be kept for five years after the business relationship ends.

Under EU law the electronic form is not an obstacle in itself, but national law can ask for more. Article 25 of the eIDAS Regulation says that an electronic signature cannot be denied legal effect or admissibility as evidence solely because it is electronic. It also gives a qualified electronic signature the equivalent legal effect of a handwritten signature.

Article 2(3) limits the reach of that rule. The regulation "does not affect Union or national law related to the conclusion and validity of contracts, other legal or procedural obligations relating to form". Where national law asks only for a handwritten signature, a qualified signature has the same effect. Where it asks for a certified signature or a notarial act, no electronic signature meets the requirement on its own.

Which case applies depends on the country, and it can depend on the act the power authorises. Before relying on an electronically signed power, check three things: the law that governs the power, the law that governs the act, and what the register, court or bank receiving it will accept.

Where the choice is open, the level of signature decides how easily the power can later be tied to the principal. A qualified signature rests on a certificate that is issued only after the provider has verified the signer's identity (Article 24(1)).

Often yes, but usually with extra steps. The receiving country's law decides what form a foreign power must take, and the authority or counterparty receiving it decides what proof it wants to see.

A common request is notarisation in the country where the power was signed, followed by an apostille. An apostille is a certificate issued under the Hague Convention of 5 October 1961. It confirms the origin of a public document, such as a notarial act, so that other countries in the convention accept it without further legalisation. It says nothing about the content. For countries outside the convention, legalisation through consulates may be needed, and a certified translation may be requested as well.