Understanding Power of Attorney: Functions, Types, and Examples
ADCO Law
ADCO Law
Some of you may have frequently heard the term “Power of Attorney”. This document plays a crucial role in various legal and business matters, yet many may not fully understand its purpose. So, what exactly is a Power of Attorney? In this article, we will discuss the definition of a Power of Attorney, its types, and how to create one so that you can better understand this important document.
What is a Power of Attorney?
A Power of Attorney is a legal document that grants authority to a person (the attorney-in-fact) to act on behalf of another person (the principal) in specified matters. Article 1792 of the Indonesian Civil Code states that a power of attorney is “an agreement whereby one person grants another person the authority to act on his behalf.” From this definition, a Power of Attorney is a legal document that transfers certain authority from the principal to the attorney-in-fact to perform legal actions on behalf of the principal.
This document is important in various contexts, ranging from business and legal matters to everyday situations. In many cases, a Power of Attorney facilitates processes carried out by the person receiving the authority, especially in cases where the principal is unable to do so.
Types of Power of Attorney
- General Power of Attorney
A General Power of Attorney or Surat Kuasa Umum is a document that grants the attorney-in-fact the authority to manage the principal’s interests in general matters. According to Article 1796 of the Indonesian Civil Code, “a general power of attorney only covers management-related actions. A power of attorney must be explicitly stated for actions involving the transfer of goods, placing mortgages, making settlements, or other actions that can only be performed by the owner”. This means that a General Power of Attorney cannot be used for specific actions that require the principal’s express authorization.An example of a General Power of Attorney can be found in financial management, where an individual grants another the authority to manage banking transactions, investments, or bill payments. A General Power of Attorney is often used when the principal is unable to be physically present to carry out necessary actions. However, it cannot be used to represent the principal in court. - Special Power of Attorney
On the other hand, a Special Power of Attorney or Surat Kuasa Khusus grants the attorney-in-fact the authority to perform more specific actions. Based on Article 1795 of the Indonesian Civil Code, a special power of attorney can only be given for one or more interests detailed in the document. This form of power of attorney can serve as a legal basis for the attorney-in-fact to act in court on behalf of the principal.For example, a property owner who wishes to sell his land can make a Special Power of Attorney that expressly states that the attorney-in-fact is only authorized to carry out land sales transactions. In this way, the principal can ensure that the attorney-in-fact cannot take any actions outside of that specified in the Power of Attorney.
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Example of Power of Attorney
Creating a proper and clear Power of Attorney ensures that the principal and the attorney-in-fact mutually understand their respective rights and obligations. Below is an example of General and Special Power of Attorney.
- Example of A General Power of Attorney
POWER OF ATTORNEY
The undersigned:
Name : [Name of Principal]
Place Date of Birth : [Place of Birth Date of Principal]
ID Number : [Principal’s ID Number]
Address : [Principal’s Address]
Phone Number : [Principal’s Phone Number]
Hereinafter referred to as the Principal.
Hereby grants power of attorney to:
Name : [Attorney-in-Fact’s Name]
Place of Birth Date : [Place of Birth Date of Attorney-in-Fact]
ID Number : [ Attorney-in-Fact’s ID Number]
Address : [Attorney-in-Fact’s Address]
Phone Number : [Attorney-in-Fact’s Phone Number]
Hereinafter referred to as the Attorney-in-Fact.
—-GENERAL—-
By this letter, I, as the Principal, grant power to the Attorney-in-Fact to withdraw cash amounting to [amount] from the bank account with the following details:
Account Number : [Account Number]
Account Holder : [Account Holder’s Name]
This Power of Attorney is made consciously and with full responsibility by the Principal. Any risks arising from this authorization will be the sole responsibility of the Principal.
Thus, this cash withdrawal Power of Attorney is made to be used as necessary.
Jakarta, [Date]
Principal Attorney-in-Fact
[Stamp]
[Principal’s Name] [Attorney-in-Fact’s Name]
- Example of A Special Power of Attorney
SPECIAL POWER OF ATTORNEY
The undersigned:
Name : [Name of Principal]
Place Date of Birth : [Place of Birth Date of Principal]
ID Number : [Principal’s ID Number]
Address : [Principal’s Address]
Phone Number : [Principal’s Phone Number]
Hereinafter referred to as the Principal.
Hereby grants power of attorney to:
Name : [Attorney-in-Fact’s Name]
Place of Birth Date : [Place of Birth Date of Attorney-in-Fact’s]
ID Number : [ Attorney-in-Fact’s ID Number]
Address : [Attorney-in-Fact’s Address]
Phone Number : [Attorney-in-Fact’s Phone Number]
Hereinafter referred to as the Attorney-in-Fact.
—-ESPECIALLY—-
To perform the following actions:
- Sell the land at [Land Address] with ownership certificate number [Certificate Number].
- Sign the deed of sale and purchase of the land.
- Handle all necessary documents related to the land sale process.
This Power of Attorney is made consciously and with full responsibility by the Principal. Any risks arising from this authorization will be the sole responsibility of the Principal.
Thus, this Power of Attorney to withdraw cash is made to be used as necessary.
Jakarta, [Date]
Principal Attorney-in-Fact
[Stamp]
[Principal’s Name] [Attorney-in-Fact’s Name]
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Key Elements in a Power of Attorney
Every Power of Attorney contains several key elements that must be included to ensure the document is valid and effective:
- Identification of Principal and Attorney-in-Fact: The principal and attorney-in-fact’s name, address, and ID number (such as ID card number) must be clearly stated.
- Scope of Authority: A clear description of the actions the attorney-in-fact is authorized to perform, either general or specific.
- Signatures: The Power of Attorney must be signed by the principal and, if necessary, by the attorney-in-fact to affirm acceptance of the power granted.
A Power of Attorney is a vital document that authorizes someone to act on behalf of another in legal and business matters. Understanding the types and key elements of a Power of Attorney can help you use this document more effectively and properly.
For more information on Power of Attorney, contact us at ADCO Law.
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About ADCO Law:
ADCO Law is a law firm that offers clients a wide range of integrated legal services, including commercial transactions and corporate disputes in a variety of industry sectors. Over the course of more than a decade, we have grown to understand our clients’ industries and businesses as well as the regulatory aspects. In dealing with business dynamics, we provide comprehensive, solid legal advice and solutions to minimize legal and business risks.
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