Revoking a power of attorney to a shareholder in an LLC Company

A (POA) power of attorney provides another person, the agent, authority or power in making financial decisions on the behalf of the grantor. The power may be given to another shareholder to an LLC or company in UAE. The legal document is particularly useful in the case of incapacitation or illness, as well as for situations in which the grantor may be unreachable or out of the region.

If a durable POA is used, then it will remain in effect even from the time that the grantor dies. There are situations wherein there is a need to revoke a power of attorney as there may be a change in circumstances such as the agent becoming unavailable.

Reasons for the Cancellation of a POA

There are several instances wherein there is a need or desire to cancel or revoke powers assigned to an agent through a power of attorney. The most common reasons are the following:

  • Change in relationship – it is very common to select a family member to be the agent. If a spouse was appointed as the agent and the couple decides to go through divorce proceedings, then the power of attorney may be processed for revocation.
  • Change of mind – this is when there is no longer trust between the relationship of the grantor and the agent that has been selected. This may also be when the granted opts to make another person as the agent. A grantor may also decide that is no longer needs a POA at all.
  • Death – when the agent that was selected by the grantor dies, the POA that makes the deceased person the agent has to be cancelled to assign someone else.
  • Unavailability – whenever the agent that was appointed chooses to move far away or relocate (may also be to take an extended vacation or trip), the grantor may want someone else to be the agent who is readily available. The original POA can be cancelled and a new one will be created for the appointment of another agent.
  • Incapacity – when the person that was selected as the agent for the grantor is not competent mentally anymore, especially in making decisions for the grantor, then the POA has to undergo revocation and another person has to be chosen as the new agent.
  • Breach of contract – although a power of attorney, upon being granted, has an irrevocable nature, it can be revoked if there is evidence of gross mismanagement on the part of the authorized person. The agent can be filed a lawsuit for breaching the contract terms or for acting beyond the powers provided by the power of attorney.

How to Cancel a POA

There are three methods to cancel the authorized assigned with a power of attorney, but all of which need the grantor to be mentally competent.

  • Destroying the POA – if the power of attorney was created, but no copy was given to anyone, then the POA can be destroyed. This is the case if the agent was not informed yet regarding the creation of the POA to be destroyed. For this, no revocation in writing is required.
  • In writing – a written cancellation or revocation may be created that states the cancellation of the POA that was created naming someone as the agent on a certain date. It should be signed in front of the notary public, and certified copies have to be provided to all concerned parties, including the agent and financial institutions where the original POA was presented and used. The grantor may request to have copies of the original POA returned. If the original POA has to be changed rather than cancelled, it still needs to go through revocation then the grantor needs to create a brand new POA.
  • Creating a new POA – another way in cancelling a POA is creating a POA that states any previous powers of attorney are to be revoked. A POA is best created with the help of a legal drafting team in Dubai, UAE.

Take note: there are generally two kinds of power of attorney: the general POA and the specific POA. A POA that authorizes an agent to deal with general matters of decision-making is the general type. As for a specific, also referred to as special POA, it provides authority in dealing with a specific subject matter.

Revoking a POA is the right of a grantor at any time. Whenever you decide to cancel a POA you have created previously, it is important that you do so accordingly so the document is deemed invalid in the eyes of the law. Click here to learn more about power of attorney here.