In Georgia, people frequently associate a power of attorney as part of an estate plan. Another use for a power of attorney is in a business context. A business owner who is worried about what might happen to their solely owned business if they are incapacitated or unable to make decisions on their own may want to think about a power of attorney. Understanding the agent’s rights under the law to act on behalf of the principal is essential with this document and deciding whom to trust.
What can the agent do with a solely owned business?
For businesses that are solely owned by the principal, the agent has a wide array of rights and responsibilities. For example, if there was a contract that was agreed to before the power of attorney was executed, they have the right to continue, alter, extend, renegotiate or terminate that contract.
Regarding the business, the agent can decide on where it operates. For example, if there is perceived benefit from moving from one office, a brick and mortar retail location or a warehouse, the agent can assess its positives and negatives and act accordingly. The business itself can be changed. Perhaps the agent wants to sell items or provide services that are different from what the business was under the stewardship of the sole owner. They have the legal right to do that.
The strategies of the business can be changed. That includes how it manufactures its products, sells them, merchandises them, finances them and advertises. Insurance is a necessity in business and the agent can change the type that is carried. Employee-business relations can differ. The business entity itself can be placed under a new business entity like switching from a C-corporation to a limited liability corporation (LLC). The agent can also ask for money that was owed to the principal and disperse it as they see fit.
Business powers of attorney carry great responsibility and professional help is key
To make sure a business continues to operate if its sole owner is unable to oversee it, having a power of attorney is a wise step. However, since the sole owner will be granting great power to the agent, it can lead to concern that the business could be radically altered. For those who are thinking about a scenario where they need another person to run the business in their place, having legal assistance with business law and the available options is crucial to know what steps to take.