A company can only act through its directors, and if the sole director is not able to act the day-to-day operations of the company are effectively ‘frozen’ until a new director is appointed. The only people who can appoint a new director are the company’s shareholders – and if the sole director is also the sole shareholder further difficulties arise.
If you are a director (or sole director) of a company have you ever thought about what would happen to your company if you became incapacitated?
If you have appointed your own personal enduring attorney then depending on the terms of your company’s constitution and/or any shareholder’s agreement your attorney should be able to appoint a replacement director by passing a written resolution (provided you have given them wide enough powers in the enduring power of attorney document itself).
If you have not appointed your own personal enduring attorney, then the affairs of the company will remain frozen until such a time as an application is made to QCAT to have a person appointed to administer your affairs. This can take months.
A properly drafted and considered personal Power of Attorney will give your appointed attorney the power to act on your behalf in your capacity as Director.
A Company Power of Attorney allows an attorney to be appointed to execute specific documents on behalf of the company, or for a specific period of time. For example where a company’s directors are unavailable to act for and on behalf of the company, if they are overseas. A Company Power of Attorney should include:
- an effective date of the appointment;
- the level of authorisation of the attorney; and
- the company’s indemnity to the attorney.
Please contact us for advice in dealing with your position as Director upon incapacity or absence from the Country.