Q&As

Does a power of attorney given by a company survive administration or liquidation? Is it possible to draft the power of attorney to enable it to survive?

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Published on LexisPSL on 31/05/2017

The following Restructuring & Insolvency Q&A provides comprehensive and up to date legal information covering:

  • Does a power of attorney given by a company survive administration or liquidation? Is it possible to draft the power of attorney to enable it to survive?
  • Company granting power of attorney
  • General power of attorney
  • Effect of administration or liquidation
  • Administration
  • Liquidation

Does a power of attorney given by a company survive administration or liquidation? Is it possible to draft the power of attorney to enable it to survive?

Company granting power of attorney

Whether a company (or any other body corporate) can grant a power of attorney will depend on its constitution. Article 5(1)(b) of the Model Articles for Private Companies Limited by Shares, for instance, expressly permits the board of directors to delegate any of its powers under the articles to such persons, including attorneys, as it thinks fit. For further explanation, see Q&A: Is it possible to structure a single power of attorney to be granted by several different donor companies?

The obvious example of a company granting a power of attorney is a seller in a private M&A transaction granting the buyer a power of attorney to the buyer (see Precedent: Power of attorney-private M&A purchase—share rights—corporate seller), so as to enable the buyer to exercise (vote) the rights attaching to the sale shares (in the target company) for the period in-between completion and the buyer’s name being entered in the target company’s register of members (which shouldn’t happen until the stamp duty on the shares has been paid). See our Q&A which explains this further: What are the requirements of the people with significant control (PSC) regime in the period between execution of a

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