A Power of Attorney is a legal document that gives someone power of attorney to act on behalf of the company. Typically, the Power of Attorney document carefully details the transactions and processes for which the individual is being granted power of attorney, rather than providing a general mandate that would allow the power of attorney to act with complete freedom.

A power of attorney gives legal authority to a person acting as an agent. For a company, this authority may include the ability to access financial accounts, sell or place new orders in securities, and write checks, although the agent may also perform a variety of other activities to keep the business running. For security reasons, a POA document should strictly restrict the agent's activities or access to specific accounts.

Powers of attorney can be used effectively in the normal course of business or only in certain circumstances - such as when the business owner is unable to make decisions or has no access to the business accounts.

Pros and cons of POA authorization
The primary benefit of having a business power of attorney is that you have the security of a contingency plan in the event the business owner or other authorized representative is unable to perform their duties. Authorizing a representative to act on their behalf prepares the company for unexpected situations and allows important business decisions to be made in a timely manner. If the business owner has not granted anyone legal power of attorney, there is always a risk that at some point they will no longer be able to make important business decisions or carry out essential transactions, which can lead to enormous damage to the company and its reputation. Not having an authorized representative can result in not paying salaries on time, not servicing business loans or mortgages, not paying third-party vendors, and losing potential contracts.

The benefit of being able to authorize someone to act on behalf of the account holder comes with the peace of mind that you can trust the authorized agent with access to your business account. Therefore, you are strongly advised to think carefully before granting someone a POA and giving him or her access to a bank account and the ability to make important business decisions. The person you nominate as an agent has unsupervised access to Company funds, which could potentially increase security risks if the nominee acts in interests other than those of the Company.