Key Distinctions to Understand: General POA vs Special POA
In the UAE, it is common to utilize general and specific/special powers of attorney for various transactions. Therefore, it is crucial to grasp the fundamental distinctions between these two types before making a decision. This post aims to elucidate these key differences, providing you with a comprehensive understanding of general and special powers of attorney. Below, we have outlined four significant distinctions for your clarity and comprehension.
General vs. Specific: A Comparison
A general power of attorney and a special power of attorney have distinct differences. While a general power of attorney grants broad powers to handle day-to-day affairs and represent an individual before third parties and government departments, it may not always be accepted by them. These entities may require specific powers to be specified in the power of attorney. This is where a special power of attorney, also known as a specific power of attorney, comes into play. A special power of attorney provides a solution to address any acceptability challenges faced by a general power of attorney.
Selling vs Buying Assets and Property: An Analysis
One key distinction between general and special power of attorney lies in their respective scopes. While general power of attorney grants the authority to handle various matters, such as purchasing assets on your behalf, it’s important to note that the UAE authorities adopt a conservative approach in asset sales. In such cases, they consistently require a special power of attorney. Specific scenarios that necessitate a special power of attorney include the sale of real estate properties, shares in companies, and vehicles to third parties. By implementing a special power of attorney, the UAE authorities aim to ensure transparency and prevent any potential dishonesty or fraud in asset sales. Thus, a special power of attorney effectively conveys the principal’s authorization and intent regarding asset transactions.
Unlocking the Potential: Limiting Powers of Attorney to Transactions
A general power of attorney is a broad and all-encompassing expression of the principal’s intentions, not limited to any specific transaction. In the Emirate of Dubai, it remains valid indefinitely, while in the Emirate of Abu Dhabi, it holds for a period of 3 years. Conversely, a special power of attorney is confined to the specified transactions in its scope. For instance, if a special power of attorney is created for a property sale, it becomes obsolete upon the completion of the transfer. On the contrary, a general power of attorney remains valid regardless of the completion of any general transactions carried out by the attorney/agent on your behalf, without reliance on any specific transaction.
Continued utilization of power of attorney
It’s crucial to exercise caution when considering granting a general power of attorney, taking into account the specific requirements and ongoing powers involved. Our experience has shown that it may not always be advisable to provide a general power of attorney when the transaction at hand is well-defined and known. Therefore, it’s important to carefully select between a general and special power of attorney when choosing your attorney/agent.
In conclusion, it is crucial to thoroughly consider the aforementioned four points before determining the specific nature and type of powers of attorney that best align with your needs. PRO Consultancy POA can assist you in making an informed decision regarding the appropriate power of attorney to effectively convey the powers for your intended purpose.