A power of attorney can be either "general" or "specific". The main difference between the two is that the former allows the attorney to sign any document on behalf of the principal, while the latter limits the attorney's authority to the extent specified in the power of attorney agreement. For example, a specific power of attorney may have limitations set according to the nature of the task (eg, if it is done for a certain purpose or for buying a particular piece of property for a particular price) or according to a time limit (eg, for two years while the principal is away). A power of attorney is particularly useful in circumstances where the individual is a person residing abroad and appoints a law firm in Cyprus to act on their behalf for the purpose of conducting their business and affairs in Cyprus.
A power of attorney that is executed in Cyprus must be signed in the presence of a certifying officer who will certify the principal's signature. Where the power of attorney is executed abroad for acts to be performed in Cyprus, it must be signed in the presence of a notary and be apostilled.
Alternatively, an individual can create a verbal fiduciary relationship to delegate authority for managing their affairs. Nonetheless, this can be inexpedient since there is little certainty as to the scope and breadth of the agent's authority, which can lead to discrepancies with third parties; public as well as private authorities, organisations or institutions are not keen to recognise an agency relationship in the absence of documentary evidence that authorises the attorney to act on the principal's behalf.
By using legal professionals, the principal can be confident that their mandate will be performed properly. A power of attorney permits another party to perform an act on behalf of the principal in almost any type of transaction or business. For example, if a non-Cypriot national wishes to purchase property in Cyprus but cannot be present at the time of either the conclusion of the contract of sale or the transfer of the property into their name, the buyer may appoint a legal professional as their attorney to carry out the transaction on their behalf.
Appointing a legal professional to act as an attorney (ie, under a power of attorney agreement) in commercial transactions may provide additional protection to the principal, not only because a legal professional possesses the relevant knowledge and experience to ensure that the transaction is successfully completed in the principal's favour, but also because it will make it easier to foresee and mitigate any practical delays or issues which may arise throughout the process.
The general scope of a power of attorney is to enable individuals with hectic schedules to keep their affairs managed. Additionally, delegating authority to legal individuals can benefit the principal, since the attorney will always act in the principal's best interests; an attorney owes fiduciary duties to the principal and must promote the principal's interests and not their own interests or those of any third party. The authority vested in the attorney will expire upon completion of the mandate of the attorney or in conjunction with the time limits; however, the principal can revoke the authority granted at any time.
For further information on this topic please contact Andrea Psara or Ioanna Martidi at A G Paphitis & Co by telephone (+357 25 73 10 00) or by email ([email protected] or [email protected]). The A G Paphitis & Co website can be accessed at www.agplaw.com.