Registered businesses are required to appoint a person to act on their behalf in all legal transactions.This is the person with the legal authority to represent and enter into contracts that enhance the operations of the company.The person appointed as the business legal representative is required to act within the limits of his power as stated in the legal documents of the company which appointed him.
The person appointed to oversee the company’s legal transactions performs the powers and duties accorded to him by the company’s documents and business law.
The powers possessed by legal representatives are broad and the liability of these legal professionals can be unlimited.
When looking for a suitable person to act on behalf of the company in all legal transactions,business owners should understand that the appointed person will have all the tools to the capital, finances and business secrets. Failure to understand the responsibilities and authority of the legal professional can lead to a complicated situation in case the person acting on behalf of the company engages in fraudulent or deceitful acts.
Powers and responsibilities of the representative
The legal professional has authority to act in conformity to the goals and objectives of the business. This includes:
•Executing all legal transactions that are within the company’s objectives.
•Representing the company during legal proceedings.
•Taking all necessary legal measures to protect the assets and business interest of the company.
•Authorizing litigation and legal representation of the company.
Liabilities of the representative
Legal representatives are required to maintain a high standard of competence and care and they may face criminal, administrative and civil liability if they act in a way that contravenes the law. The legal professional may be ordered by a court of law to pay penalties for losses suffered by the business.
If a legal representative creates a contract that exceeds his or her powers, such unauthorized will be considered valid unless the counter party is aware that the contract exceeds the powers of the legal professional.
The company’s legal documents and articles of association define the powers and limits of its the person appointed to act on its behalf in all legal transactions. To avoid difficulties it is crucial for businesses to limit the powers of the representative in the company’s business documents to minimize the possible risk if there is a rogue legal professional appointed to represent the company.
If you are based in the USA, contact our sister law firm based in Tennessee.