Company Power of Attorney: When You Need One and How to Set It Up

Running a small business often means moving quickly: signing contracts, opening bank accounts, dealing with landlords, buying equipment, or completing a deal when you’re not physically available.

But what happens when the director who usually signs documents is on holiday, stuck overseas, unwell, or simply too stretched to handle every signature and meeting?

That’s where a company power of attorney can be a practical, legally recognised tool. Done properly, it can keep your business moving without losing control of who can bind the company (and on what terms).

In this guide, we’ll break down what a company power of attorney is in the UK, when you might need one, and how to set it up safely.

This article is general information only and not legal advice. Execution and witnessing rules can vary depending on the document type, the transaction, and what the counterparty will accept.

What Is A Company Power Of Attorney (And What Can It Do)?

A company power of attorney is a formal document where a company authorises a person (or another organisation) to act on the company’s behalf.

In plain terms, it’s a way for your company to say:

• “We authorise this person to sign and deal with X for us” (for example, a lease, bank forms, or a specific transaction); and
• “Their actions (within the authority given) bind the company.”

The person appointed is usually called the attorney (or “authorised attorney”). The company giving the authority is sometimes called the donor (or “grantor”).

Is A Company Power Of Attorney The Same As Signing Authority?

They overlap, but they’re not exactly the same thing.

Many businesses informally give “signing authority” to staff (for example, allowing a finance manager to sign purchase orders). A power of attorney is more formal and is often requested by third parties (banks, landlords, counterparties in deals) because it’s clear evidence that the person has authority.

If you’re thinking about delegating signatures generally, it’s worth reading up on signing authority and how it works in practice.

What Types Of Things Can A Company Authorise Under A Power Of Attorney?

A company power of attorney can be broad or narrow. Common examples include authority to:

• sign contracts for goods and services
• sign or manage a commercial lease (or lease-related documents)
• operate bank accounts and execute banking mandates
• complete a company sale, asset purchase, or investment transaction
• sign documents for a property purchase or sale
• sign specific documents during a deal (for example, disclosure letters, completion documents, or ancillary agreements)

The key is that the authority must be clearly written and appropriate for what you actually want the attorney to do.

When Do Small Businesses Typically Need A Company Power Of Attorney?

Most small businesses don’t use a company power of attorney every day. But when you need one, you often need it urgently (and delays can cost you money or kill a deal).

Here are some of the most common situations where a company power of attorney makes sense.

1) Your Director(s) Aren’t Available To Sign

If you have one director who signs everything, you’re vulnerable to delays if they’re away, unwell, or tied up. A company power of attorney can keep day-to-day operations moving without needing a director at every turn.

2) A Third Party Insists On It (Especially Banks And Property Transactions)

Banks, lenders, landlords, and some counterparties often want clear evidence that the person signing has authority.

Even if, internally, you’re comfortable that your operations manager can sign a lease document, the landlord’s solicitors may not accept it without a power of attorney or equivalent corporate authority.

3) You’re Doing A Transaction With Lots Of Documents

Imagine you’re buying another business, raising capital, or completing a refinance. Completion packs can include dozens of documents, some requiring signatures at speed. A power of attorney can allow a trusted person to sign on behalf of the company to avoid bottlenecks.

This can also sit alongside formal corporate approvals, like board minutes and resolutions.

4) You Need Someone On The Ground In A Different Location

For example, if your director is abroad but the company needs documents witnessed or delivered locally, a power of attorney can help you move forward without flying someone back just to sign paperwork.

5) You Want Clear Limits (So Delegation Doesn’t Get Messy)

Some businesses delegate informally and hope it’s fine. The risk is that “authority” becomes vague over time - and in a dispute, vagueness is rarely your friend.

A properly drafted power of attorney can help you clearly define:

• what the attorney can do
• what they cannot do
• time limits
• spend limits
• any approvals needed (for example, “must obtain director approval before signing anything over £10,000”)

How Does A Company Power Of Attorney Work Under UK Law?

In the UK, powers of attorney are commonly used and recognised, and companies can grant them. The legal rules can get technical depending on what you’re trying to sign and how the document must be executed, but the big picture is:

• a company can grant authority to an attorney to act on its behalf
• the attorney can then sign within that authority
• third parties may rely on that authority (especially if it’s clear and properly executed)

Do You Need A Deed Or A Simple Document?

In most cases, a company power of attorney is granted as a deed (and, for companies, this is the usual approach under the Companies Act 2006). In practice, banks, landlords, and counterparties commonly expect it to be executed as a deed, particularly for property and finance matters.

If you’re not sure what’s required, it’s worth understanding executing contracts and deeds, because the rules are different (and getting it wrong can cause real headaches later).

What About “P.P.” Signing And Signing On Behalf Of Someone Else?

Some businesses use “p.p.” signatures in letters and emails (meaning someone signs on behalf of someone else). That can be appropriate in some contexts, but it’s not the same as having a properly drafted company power of attorney - especially when you’re signing high-value contracts or deeds.

If your team uses this approach for day-to-day correspondence, it’s still important to understand the risks and the right way to do it, including signing on behalf of someone.

Do Signatures And Witnessing Requirements Matter?

Yes - a lot.

If a third party needs a deed, they may require specific execution formalities (including witnessing) before they’ll accept the document. If you’re setting up a company power of attorney to sign deeds (or sign documents that must be executed as deeds), it’s crucial to get execution and witnessing right from day one.

For a broader overview, these guides can help you get your head around the basics:

• legal signature requirements
• who can witness a signature

Even small mistakes (like using an ineligible witness, or missing the right signing block) can cause delays or force you to re-sign everything.

How To Set Up A Company Power Of Attorney (Step-By-Step)

Setting up a company power of attorney doesn’t have to be complicated - but it does need to be deliberate. You’re granting authority for someone else to bind your company, so it’s worth doing properly.

Step 1: Decide What The Attorney Needs To Do (And What They Don’t)

Start with the business problem you’re trying to solve.

Ask yourself:

• Is this authority for a single transaction (for example, signing one lease)?
• Or is it for ongoing operations (for example, banking and supplier contracts for the next 12 months)?
• Do you want spend limits or value caps?
• Should they be allowed to sign deeds, or only “simple” contracts?
• Do they need authority to delegate further (usually best avoided unless you have a clear reason)?

The clearer you are here, the safer and more useful the final document will be.

Step 2: Choose The Right Attorney

Your attorney could be:

• a director
• a senior employee (for example, operations manager or finance lead)
• a professional adviser (in some deal contexts)
• another company (less common, but possible depending on the situation)

Whoever you choose, you should be comfortable that they understand:

• the limits of their authority
• your internal approval process
• the consequences of signing the wrong thing

Remember: a power of attorney doesn’t replace internal governance. It’s simply the mechanism that lets someone act externally on the company’s behalf.

Step 3: Get The Internal Approvals Right

Most companies grant a power of attorney using a board decision (and sometimes shareholder approval if your constitution requires it or if the transaction is significant).

This is where your company’s internal rules matter, including its Articles and any shareholder arrangements. If you have multiple founders or investors, your Shareholders Agreement may also contain approval thresholds or signing requirements for major commitments.

In practice, you’ll usually want:

• a board meeting (or written board resolution) approving the power of attorney; and
• clear instructions on execution and limits.

If you want a starting point for documenting decisions properly, a Directors Resolution is often part of the paper trail.

Step 4: Draft The Company Power Of Attorney Properly

A well-drafted company power of attorney should clearly set out:

• the company’s details (including registered name and company number)
• the attorney’s details
• the scope of authority (what they can do)
• any restrictions (value limits, approvals required, exclusions)
• the start date and (if appropriate) end date
• whether they can sign deeds
• revocation (how the authority ends)

This is one of those documents where generic templates can create more risk than they solve. The wording needs to match what your counterparties expect and what your business actually wants to allow.

Step 5: Execute The Document Correctly

Once drafted, the company power of attorney must be signed in the correct way for your company.

The right method depends on factors like:

• whether it’s executed as a deed
• how your company normally executes documents under the Companies Act 2006
• whether you’re using directors, a company secretary (if you have one), or witnessing

This is where businesses often get stuck - not because the idea is complex, but because the formalities can be easy to overlook.

Step 6: Keep Records And Provide Copies To The Right People

In day-to-day life, the attorney will need to show evidence of their authority.

So you should:

• keep a signed original (or properly stored electronic copy)
• provide certified copies if needed (some banks request this)
• ensure your internal team knows who has authority (and the limits)
• consider updating your contract signing process so your staff know when a director must be involved

Common Risks (And How To Avoid Them)

A company power of attorney is powerful - which is exactly why you should treat it like a risk-management tool, not just admin.

Risk 1: Granting Authority That’s Too Broad

If the power of attorney says the attorney can do “anything the company can do”, you’re creating unnecessary exposure.

How to avoid it: limit the scope to what you actually need, and consider value caps and time limits.

Risk 2: Third Parties Rejecting It Due To Execution Issues

If the document isn’t executed correctly (or doesn’t meet a counterparty’s requirements), you can lose time and leverage when it matters most.

How to avoid it: check execution requirements early, especially if deeds, property, or banking are involved.

Risk 3: Internal Confusion About Who Can Sign What

Sometimes a company grants a power of attorney, but the team continues to follow informal processes. That can lead to conflicting instructions, duplicated efforts, or someone signing without the right internal approval.

How to avoid it: document your internal sign-off process and align it with your actual authority structure (including any delegated authorities).

Risk 4: Not Revoking It When Circumstances Change

If an employee leaves (or changes role), an old power of attorney can remain “out there” unless you revoke it and notify relevant third parties.

How to avoid it: have an offboarding checklist that includes revoking delegations and reviewing signing authority.

Risk 5: Using A Power Of Attorney When A Different Document Is Better

In some cases, what you really need is:

• a contract signed properly by directors
• a board resolution authorising a specific action
• an internal delegation policy rather than a formal power of attorney

How to avoid it: get legal advice early so you choose the simplest tool that does the job properly.

Key Takeaways

• A company power of attorney lets your company authorise a person to act and sign on the company’s behalf, within defined limits.
• Small businesses often use a company power of attorney when directors are unavailable, when a bank/landlord requests formal authority, or when a transaction requires lots of signatures quickly.
• The scope matters - you should clearly define what the attorney can do, set value limits where appropriate, and consider time limits to reduce risk.
• Execution formalities are critical, especially if the power of attorney is a deed or will be used to sign deeds or property-related documents.
• Keep clean internal records: board approvals, signed copies, and a clear process for revoking authority when roles change or people leave.
• Because this document can bind your company, it’s worth getting it drafted properly rather than relying on a generic template.

If you’d like help drafting a company power of attorney (or reviewing your signing process so your business is protected from day one), you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.