Zimpapers Logo

Godknows Hofisi Business & Law

I

 have been requested by some readers of this column to explain the difference between power of attorney and a board resolution.

These documents are used widely in business or ordinary day life. In this article, I explain the difference and use of the two documents.

Power of Attorney

Kindly refer to my article published on May 18, 2023 titled “General vs special power of attorney”. 

I explained in that article that a power of attorney is a legal document that authorises another person, called an attorney or agent, to act on behalf of the person granting or creating the power of attorney, called the principal, in the event that the principal is not in a position to personally make the decision or perform the act, normally because of distance or unavailability.

The principal will be bound by the decisions or acts of the appointed attorney or agent.

There are two types of powers of attorney, general power of attorney and special power of attorney. 

The simple distinction is that the general power of attorney gives general or broad authority to the attorney or agent whereas the special power of attorney gives limited or narrow authority.

For example, the special power of attorney can be granted to someone to            represent the seller of an immovable property to sign an agreement of sale, attend Zimbabwe Revenue Authority interviews for capital gains tax and sign all documents necessary to pass transfer of the property from the seller to the purchaser.

Board resolution

In this case a juristic person such as a company wishes to appoint someone such as its director or manager to represent it in a certain situation such as the sale of an immovable property. 

The board of directors of such a company will make a decision to appoint that person and clothe the representative with the authority to make certain decisions or perform certain acts thereby binding the company.

Below are some of the normal contents found in a board resolution of a company appointing a representative.

Title

Resolution passed by the board of directors of Good Company (Private) Limited at its meeting held at Harare, Zimbabwe on June 1, 2023.

Resolution

It was resolved that A. Alfred in his capacity as director be and is hereby authorised and empowered to sign and execute on behalf of the company all agreements and documents necessary for purposes of sale and transfer by the company to P. Purchaser of a certain piece of land situate in the District of Salisbury called Lot A of Subdivision AB of Good Suburb, measuring 4 000 square metres.

A resolution can also be used to appoint a company representative to negotiate or sign contracts, to represent the company in legal proceedings where a company representative is required, or deal with many other situations.

Conclusion

In summary a power of attorney is normally granted by one individual to another person to represent the grantor. In the case of a resolution, it is the board of directors of a juristic person such as a company or trustees in a trust granting the powers to a representative by way of a collective or collegial decision.

Disclaimer

This simplified article is for general information purposes only and does not constitute the writer’s professional advice.

Godknows (GK) Hofisi, LLB(UNISA), B.Acc(UZ), Hons B.Compt (UNISA), CA(Z), MBA(EBS, Heriot- Watt, UK) is the Managing Partner of Hofisi & Partners Commercial Attorneys, chartered accountant, insolvency practitioner, registered tax accountant and advises on deal and transactions. He has extensive experience from industry and commerce and is a former World Bank staffer in the Resource Management Unit. He writes in his personal capacity. He can be contacted on +263 772 246 900 or [email protected]