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All You Need to Know about Powers of Attorney

A power of attorney (POA) is a legal document in which the principal designates another person to act on his behalf to make all decisions, in specified matters or in all matters. There are two types of powers of attorney typically used by individuals in the UAE

  • General Power of Attorney: The general power of attorney grants authority to make decisions that are not specific in nature. The powers granted in this type of power of attorney can be very broad and usually used to allow the agent (the person authorized) to handle all affairs during a period when the grantor is unable to do so.
  • Special Power of Attorney: As for a special power of attorney, it gives the agent authorization to perform some specific tasks on behalf of the principal for one or more specific transactions. The special power of attorney can also be used when one cannot handle certain affairs due to other commitments or for health-related reasons.

For Companies 

There are two types of poa for companies

  • General Manager power of attorney

This POA is granted by the owner(s) of the company to general managers of the company to authorize the general manager to manage the day-to-day affairs of the company. This type of POA also lists the special transactions that the general manager may be authorized to undertake on behalf of the company to ensure smooth operations.

  • Special power of attorney

This type of special power of attorney is granted by the company to the employee in situations where the company requires the individual to carry out specific transactions such as signing contracts or sale of assets.

When You Need a Power of Attorney

  • Special circumstances: special circumstances may trigger the need for a POA for any person over the age of 18. for e.g. Military personnel deployed overseas leaving behind their families someone to act on them.
  • Incapacity: Younger people who travel a great deal also require a POA so that someone to handle their affairs, especially if they have no spouse to do so in their absence. The most common way to establish a POA is when someone, usually is retired, or if a person faces a serious, more long-term health crisis that cannot easily be transferred.

A power of attorney is primarily used as a device for ensuring that directives and decisions in your best interests are carried out.

If you are not able to act on your own due to mental or physical incapacity, an agent may be called upon to make financial decisions to ensure your well-being. These may include paying bills and selling assets to pay for medical expenses. A power of attorney has to detail the scope and extent of what an agent has to do.

The authorized person who deals with such POA deals with property or banking transactions, deal with retirement or government benefits as well as healthcare billing and other matters, including family interests, are the most important features of a POA.

How does the power of attorney work?

The person in need of a POA will select someone to handle affairs if and when incapable of doing. You could establish a POA that only applies when you are no longer capable of handling your affairs yourself. It goes into effect immediately so your agent can act for you in your absence.

In case if you need to set up a legally binding contract the capacity of the principal must be when the document is drawn up. This also means she should easily understand the terms of the contract.

This POA can be easily transferred or revoked at any time simply by vanishing the original document and preparing a new one, or by preparing a formal revocation document informing all concerned persons that the POA is no longer valid for use.

TAKE NOTE: The power of attorney is prepared in a bilingual format. Arabic translation is mandatory as the official language of the United Arab Emirates is Arabic. It is possible to have a POA in Arabic only but this is only recommended for Arabic speaking individuals only.

Power of Attorney Drafting Services in the UAE

Authorization through a POA should be given to someone you trust without hesitation. Depending on the words used in the POA, the person you select will have access to and be able to make decisions about your health, home, business affairs, personal property, and financial accounts.

You may name more than one person to act as your agent and ask that they work together. If you wish to prepare a general or special power of attorney in Dubai, we are here to assist you in the best possible ways. Our solutions are delivered by experienced lawyers who can address your needs irrespective of whether you are an individual or an organization. Contact us today for further consultation.

M. Al Khairy, LL.B. is a Senior Partner of HHS Lawyers in UAE. Practicing law for almost a decade, he has in-depth knowledge on UAE legislation with particular expertise on legal drafting, contract drafting, labor disputes, family law, and regulatory compliance for business organizations. Al Khairy also provides counsel on legal rights and obligations in the UAE to clients, including individuals and businesses subject to investigation or prosecution under Criminal Law by major regulators. Read more