General Power of Attorney: A Comprehensive Guide from Draft to Assignation of Authority

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Power of attorney is an important tool available in the Indian legal system that allows a person the ability to transfer authority to a trustworthy person for making decisions on their behalf. It is a tool if exercised with caution yields multiple benefits, however, it comes with high risk as well. The success of power of attorney depends on the intention of the person to whom decision making authority has been granted. PoA is beneficial in situations where a person becomes incapacitated due to some reasons and unable to take decisions on his or her behalf then granting an entrusted person with the authority to make decisions is a good thing.

Based on the requirements there can be multiple types of power of attorney, however, the most common types are General Power of Attorney and Specific Power of attorney. Let us take a closer look at both these powers of attorney and examine the key differences. 

Understanding General Power of Attorney:

Before we examine the key details of general power of attorney let us first understand the key elements of the power of attorney. This concept of power of attorney has two main parties which are called principal or donor and agent of grantee.

Who is the Principal in Power of Attorney Concept?

In the concept of power of attorney, principal or donor is the person who grants authority to someone to act on their behalf. In situations where the grantor is not able to make a decision and believes that it will be better in his or her interest if someone else will make decisions for him or her. Then authority of the decision making can be granted by principal by signing power of attorney.

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Who is the Agent in Power of Attorney Concept?

The person who has been put in charge of the decision making on behalf of the principal is known as agent or grantee. Agents' ability to make decisions depends upon the authorities assigned by principal or donor. All actions and decisions taken by the agent are legally valid until he exceeds the authority mentioned in the PoA document.

In general power of attorney the agent gets authority of broad decision making. The authorization provided by the principal covers multiple fields. A general power of attorney can be issued to an individual or an organization as well. Some example of the authorities assigned to agent with GPA are listed below

• Signing contracts on behalf of principal
• Making business decisions
• Decisions related to financial investment
• Buying and selling immovable property
• Authority to recruit staff
• Legal representation
• Debt collection and payment settlements
• Managing tax liabilities
• Buying insurance

Eligibility Criteria of General Power of Attorney 

A general power of attorney facilitates a wide range of decision making for an agent as it offers a high degree of authority to the grantee. Below are some eligibility points to be considered for general power of attorney

• It is an all-purpose legal document both donor and grantee must understand the authorities and responsibilities in it.
• The grantee or an agent should be of sound mind and must possess the capability of efficient decision making.
• The grantee must be above the age of 18 years and eligible to enter in contracts and agreements.
• The principal assigning the authority to grantee must not be insolvent or bankrupt to keep the power of attorney legal and valid.

Since general power of attorney offers great power to an agent or organization, hence, it must be exercised with caution. The person or organization accepting the responsibilities of agent must keep the principal or donor abreast with all the transactions completed by the use of POA. A principal must perform a periodic audit of the tasks completed by the agent using power of attorney; they can choose to do this audit by themselves or can assign this responsibility to a third party.

A principal must bear in mind after assigning power of attorney that they become liable for all the actions of an agent. An agent cannot be held responsible for action until an intentional violation of terms and conditions appears. If any agent exceeds its authority and intentionally involves malpractice, you must consult a lawyer to explore the legal options. 

Registration Requirement of General Power of Attorney:

For a general power of attorney to become valid and effective following points to be considered

• The general power of attorney has to be drafted by a legal expert.
• It has to be signed in front of the two witnesses 
• It has to be notarized
• There is no mandatory requirement for registration if the GPA has been notarized.
• If the GPA supposed to be used in property transaction then it will not be valid without registration
• For property related transactions it has to be registered.
• It has to be registered in the applicable jurisdiction
• The registration of the GPA will fall under section 48 of Schedule 1 of the Indian Stamp Act, 1899
• The principal or donor must pay the stamp duty to register it. 

What is included in the draft of general power of attorney

A general power of attorney is drafted by a legal expert and some of the key elements of the drafts are given below

• Complete Name and Address of both principal and agent
• A mention of clearly outlined authorities and powers
• A clear mention of the time duration for the validity of the authorities assigned
• Any special instructions or condition that agent supposed to follow
• Revocation clause and its condition
• Terms of cancellation for either party in case they no longer wish to continue the POA contract.
• Signature of the parties involved and notarization along with witnesses

General Power of Attorney for Property:

A general power of attorney for property grants the agent the power to get involved in buying, selling and renting of the property. Since there have been multiple incidences of fraudulent transactions related to property involving PoA, hence, it has been made mandatory to register this type of power of attorney.

Special Power of Attorney

A specific power of attorney is also known as limited power of attorney, and unlike the general power of attorney, it doesn't confer a wide range of authorities to an agent. It is designed for specific tasks and the agent's authority is limited to those tasks only.

Key considerations for Special Power of Attorney

• The principal issuing the special power of attorney should be in sound mind and must clearly understand the risk and the benefits attached to special power of attorney.
• It can be used as general power of attorney and will provide special power to agents only for specific tasks.
• It should clearly outline the agent powers related to task and decision making capabilities.
• In case of the grantor inability to understand the deed due to language barrier or educational constraint the dee must be read out before taking a thumb impression.
• The registration of special power of attorney is subject to state mandate, it must follow the law of state and must be in compliance with all applicable rules and regulation to be effective.
• Notarization alone is not enough, it simply acts as an authentication, if the rule of the state demands for registration then it is the responsibility of the principal to get it registered as the requirement of the law.

Also Read: - Agreement to Sell: Examining the Nuances of Registration and Key Difference Between Sale & Agreement to Sell

Difference between Special and General Power of Attorney

Both general and special power of attorney provides authorization to an agent to act on the behalf of the principal. However these two documents are very different in terms of the power they provide to an agent.

Insaaf99 Your Legal Guide in Power of Attorney Matters

A power of attorney holds multiple benefits provided exercised with caution, to protect the right of principal an agent intervention of a legal expert is required. Insaaf99 an online legal consultation platform provides comprehensive legal assistance in POA matters.

Legal Guidance: If you are considering utilizing power of attorney then you can easily connect with our expert lawyer for legal consultation related to your options. The legal expert with Insaaf99 has deep understanding for these issues and we can help you understand the benefits and risks involved with certain types of power of attorney

Document Accuracy: Our legal expert can save you from future trouble by including clauses in your power of attorney draft, creating safeguards for you in case the agent you entrusted goes rogue. Our legal experts are well versed in the rules and regulations related to POA and can guarantee legal compliance required for this document.

Informed Decision Making: Legal expert at Insaaf99 helps you with legal insight related to your situation and help you make better decisions regarding what type of power of attorney to choose and what limitation and restriction to apply, thereby empowering you for informed decision making.

In case of any disputes or any intentional wrongdoing by the entrusted agent, Insaaf99 helps you to understand your rights and helping you explore all the legal options and remedies available.

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