Power of Attorney for a Nominee Director: Authority and Limits

A power of attorney used in a nominee-director arrangement cannot make the appointed director a passive name. The donor is the person or legal entity granting authority; the attorney is the recipient authorised to act within it and does not necessarily mean a solicitor. The document may authorise defined acts for the donor, such as executing specified company documents. It does not transfer the director’s office, board vote or statutory duties to the attorney.

Start by asking who grants the power, who receives it, which company and transaction are involved, and what exact act is authorised. Then check the articles, approval, execution, records, conflicts, duration and termination. The nominee director must stay informed, exercise independent judgement and refuse false, unexplained or concealed activity.

This is not one standard document

Several different arrangements may be called a power of attorney:

• a company authorises execution of documents on its behalf;
• an individual grants authority for a personal matter;
• a shareholder authorises an act involving shares;
• an agreement delegates an administrative task; or
• a signing mandate records limited authority.

Do not treat these as equivalent. Shareholder status alone does not transfer board powers; a specific instrument, corporate authority, governing law and the company’s articles must be checked. One director cannot necessarily delegate powers that belong to the board, and a company grant is not personal authority from every director.

This guide is a review framework for a UK company appointment, not a template or an opinion on a deed. Execution and power-of-attorney rules differ across England and Wales, Scotland and Northern Ireland and according to the document. Obtain advice from a solicitor qualified for the relevant company, transaction and governing law.

It is useful both before appointment and when an existing director discovers that a power has already been granted. In the second situation, obtain the final instrument, approvals and use log before drawing conclusions. Do not assume that a reference in an appointment pack proves execution, or that an unsigned draft is the power currently relied upon.

Keep four functions separate

The underlying decision

The board or another authorised body decides whether the company should take an action. The decision must follow the articles, proper procedure, director duties and any matter reserved to members.

The grant of authority

The donor authorises an attorney to implement stated matters. The valid instrument and approvals define the scope, not the attorney’s relationship with the owner.

Execution

The attorney signs or delivers a document within the authority. Companies Act 2006, section 47 says that, under the law of England and Wales or Northern Ireland, a company can by an instrument executed as a deed empower a person generally or for specified matters to execute deeds or other documents on its behalf. A document executed through that route can have effect as if the company executed it. This concerns authority to execute an already authorised document; it does not itself authorise the attorney to make the underlying board decision or approve the document’s contents.

Section 47 is not the answer to every Scottish execution question or every personal power. It also does not appoint the attorney as a director.

The director’s office

The director continues to hold the legal status, duties and decision-making responsibility attached to the office. The deed is not a resignation or transfer of that office. If the attorney is separately appointed as a director, that is a distinct event with its own records and consequences.

Require a specific business reason

The proposal should identify the practical need and explain why narrower authority is unsuitable. A company might need named documents executed after a recorded board approval, an authorised signatory in another place or limited continuity for a defined transaction.

Those examples do not prove that any given power is appropriate. Compare direct execution, another company signatory, a transaction mandate or limited agency. Authority should be proportionate to the purpose.

Watch for scope drift. Authority described as collecting one document should not quietly extend to bank accounts, borrowing, disposal of assets, litigation and all contracts. Do not rely on a verbal promise that broad precedent wording “will never be used”.

Director duties remain the boundary

Companies Act 2006, section 173 requires independent judgement. It contains qualifications for an agreement duly entered into by the company that restricts future discretion and for action authorised by the constitution. Those provisions require analysis of the actual facts; the heading “Power of Attorney” does not create a general exception.

Section 174 requires reasonable care, skill and diligence. A director needs enough information to understand material use, monitor the attorney and respond to concerns.

The official guidance for directors says directors must not let other people control their powers. Advice is allowed, but the director makes final decisions using independent judgement. The duties continue when a director is inactive or told what to do.

Conflicts also matter. The attorney, nominator or business owner may benefit from an act. The deed cannot declare that all future conflicts, benefits or declarations are harmless.

Map the authority before reviewing boilerplate

Write down:

• the donor’s legal identity and capacity;
• the attorney and relationship to the company or controller;
• the company, number, jurisdiction and relevant articles;
• the transaction-specific purpose;
• who decides, implements and reviews each act;
• what the director receives and when; and
• the expiry, suspension and revocation route.

Compare every clause with the map. If the document permits more than the purpose requires, ask for an explanation and independent amendment advice. Never fill a gap with the assumption that the attorney will behave reasonably.

Reconcile the power with the appointment package

Review the deed beside the articles, appointment letter, service or nominee agreement, board minutes, reserved-matters schedule and any relevant shareholder agreement. The documents should not give incompatible answers about who can decide, sign, receive information or terminate authority.

For example, an appointment agreement may promise that the director will approve material contracts, while the deed appears to let an attorney execute any contract without notice. That conflict cannot be solved by choosing the more convenient document. Identify whether the attorney may only implement an already approved decision, then require the written package to say so consistently.

Fees, indemnity and insurance should also be kept separate from authority. Payment for acting as attorney does not enlarge the grant. An indemnity cannot make an unauthorised or unlawful act authorised, and its scope is limited by law and its wording. Directors’ and officers’ (D&O) insurance may or may not respond to a particular claim. Obtain the actual terms rather than accepting “the paperwork covers everyone”.

Review the important clauses

Grant and approval

Check the donor’s capacity, the required board or member approvals, execution formalities and consistency with the articles. Make sure every schedule is present and the execution copy is the approved version.

Scope and reserved matters

Identify documents, transactions, assets, counterparties, value limits and territories. List acts that need fresh board approval, another signature, conflict clearance or professional advice. Language covering everything “a director can do” demands particular scrutiny because the office is not transferable signing permission.

Start, expiry and substitution

Record commencement, conditions, expiry and the completion event. Do not accept blank dates, retroactive authority or an indefinite dormant power. Check whether the attorney can appoint a substitute or pass authority on.

Information and records

Require prompt copies of each instruction, decision and executed document, with an accessible log. The signature block should show the attorney acting for the donor, rather than misstate that the attorney is the director.

Conflicts and third parties

Identify who benefits and how approval will be handled. Establish how a bank, counterparty or registry verifies the power and receives expiry or revocation notice. A deed does not force every third party to accept the proposed act.

Put controls around each use

Maintain a register showing the final deed, execution date, attorney, scope, expiry, originals and every use. Link each executed document to the underlying decision. The board can then distinguish implementation under authority from a decision that was never approved.

Set clear pause points, such as:

• authority or approval has expired;
• requested action falls outside the transaction;
• company information or records are missing;
• a conflict or sanctions issue is unresolved;
• ownership explanations do not agree; or
• financial distress changes what the board must consider.

The controls should match the company and authority; they are not a universal legal formula. The attorney needs a route to ask for clarification rather than stretch a clause. Directors should receive exception reports directly.

At each board review, ask whether the original need continues, whether the attorney used the power, whether every use matched an approved decision, and whether counterparties hold the current version. Record unresolved exceptions and the person responsible for action. A power that has not been used for months may still be available until expiry or effective revocation.

Legal authority is not access permission

A bank login, one-time passcode, company authentication code, electronic-signature account and Companies House personal code each has a separate purpose. A deed is not permission to impersonate the director, conceal who acted or defeat a provider’s controls.

Use an execution route that identifies the attorney and capacity. For electronic execution, retain the version, person, capacity, authority and completed audit record. Do not supply blank signatures, pre-signed forms or unrestricted credentials because an owner says the power allows it.

The same distinction applies to filings. Authority to execute a document does not automatically authorise a person to make a factual statement without source records, submit through another individual’s identity or confirm a board approval that did not occur. The company should name the presenter and preserve the filed version and authority. A director who sees a mismatch should stop the process and seek advice rather than permit a knowingly inaccurate submission.

Revocation is document-specific

Identify the donor first. A company may need board or other constitutional action to revoke its own authority. An individual director cannot assume that they can revoke a company deed personally.

The instrument may address revocation, security, third-party interests, originals and notice. Revocation may not undo completed acts, and notice may have to reach specified parties before future reliance ends. Preserve the board minute or other approval, executed revocation instrument, notices to the attorney and relevant counterparties, proof of delivery, updated authority register and evidence that credentials or originals were returned or disabled.

If the authority is revoked or the director resigns, also keep the signed revocation or resignation notice, delivery evidence, the final version of the power, and a record of every person or institution told that the authority ended.

Ask an independent solicitor:

• who can suspend or revoke;
• which approval and form are required;
• whether authority is described as irrevocable or linked to an interest;
• who must receive notice and how delivery is proved;
• what happens to originals, credentials and copies; and
• how prior acts and non-cooperation are handled.

This is due diligence, not a method for interfering with valid third-party rights.

Control and disclosure follow the facts

The attorney may have narrow execution authority or broad practical influence. The power is evidence, but does not alone decide who is a PSC, beneficial owner or shadow director.

Never use authority wording to hide the person directing the board, avoid a PSC filing or mislead a bank or regulated provider. AML due diligence may require identification of the beneficial owner and an understanding of control. Verifying the nominee director does not replace those checks.

If a person’s instructions are habitually followed by the board, read the guide to nominee and shadow directors. Do not reorganise communications to avoid a label.

Two illustrative scenarios

Capable of review: A company proposes authority for named transaction documents after recorded board decisions. The company is the donor, authority ends at completion, substitution is prohibited, documents are delivered immediately and board-reserved matters stay with the board. The nominee receives the articles and independent advice. Review is possible, but validity and suitability are not guaranteed.

Stop and decline: An owner asks the candidate to sign an undated personal power for everything a director could do, share personal logins, permit substitutes and keep use confidential. The owner says this removes director responsibility and prevents questions about control. Do not sign or share credentials. These are composite illustrations, not client cases.

Decision checklist

Before execution, answer:

• Is the donor and capacity correct?
• What exact need does the power address?
• Who makes the underlying decision?
• Is the authority no wider or longer than necessary?
• Do the articles and approvals support it?
• Are conflicts, records and reporting addressed?
• Can I monitor and pause unresolved use?
• Is expiry or revocation workable?
• Do control and ownership disclosures remain accurate?
• Has my independent solicitor reviewed the final copy?

If any answer is uncertain, pause. Read the director responsibilities guide and obtain the articles, board approval, transaction documents and final deed. If ending the office is also under consideration, follow the separate director-resignation process.

The proportionate next step is a clause-by-clause review of that actual document. A power can facilitate a defined act; it cannot make a nominee director responsibility-free or turn concealed control into proper governance.

General information only, checked on 19 July 2026; not legal, tax or financial advice.