Whether you are an entrepreneur or not – the topic of pension provision affects us all. What happens if we are unable to act ourselves – if we are unable to work due to a sudden illness or an accident forces us to stay in hospital for a longer period of time and we are unresponsive?
Family members or parents may not automatically make full and permanent decisions or act on behalf of adults in a precautionary or emergency situation. The same applies to spouses and registered partners.
What can have far-reaching consequences in the private sphere can cause serious problems for a company. If the entrepreneur is absent and can no longer fulfil certain roles, someone else has to do it. As soon as a person’s private autonomous powers are involved, i.e. we are not within organisational structures, this is only possible if there is an authorised representative.
Legally binding representation by an authorized representative
An authorised representative represents a person in a legally binding manner. So sole proprietors, general partners, limited partners, partners, shareholders, etc. need an authorised representative if they want their rights to be exercised and their obligations fulfilled in the event of their incapacity.
The right power of attorney not only specifies who should represent you, but also how the authorised representative should act. This makes it possible to give an authorised representative a framework for action or specific instructions when granting the power of attorney. This ensures that this will is declared when the power of attorney is exercised.
Powers of attorney are adapted when general conditions change
At this point, it becomes clear why we are not talking about a health care proxy or an entrepreneurial proxy. We are addressing pension management because the respective scope of action and instructions to the authorised representative change over time. For example, it is part of an entrepreneur’s risk provision to adapt the power of attorney if the framework conditions in his company have changed. This applies to all roles that a person takes on. If a few years ago the focus was on implementing a growth strategy involving a significant investment volume, today the objective may be consolidation and may involve reducing the investment volume. If the authorised representative does not have clear information about the objectives of the principal, it will not be possible to exercise the power of attorney in accordance with the entrepreneur’s wishes.
Particularly in the case of more complex corporate structures, it is essential that all legal framework conditions are harmonised. Unfortunately, we experience time and again that, for example, a majority shareholder of a GmbH has appointed an authorised representative, but the articles of association of this GmbH exclude the representation of a shareholder in the shareholders’ meeting.
THE MAK’ED TEAM advises small and medium-sized companies on issues relating to pension management. Together with our partner Jura Direkt GmbH, based in Nuremberg, we draw up legally compliant powers of attorney. THE MAK’ED TEAM works with entrepreneurs and their families to design the basis for the powers of attorney, taking into account the constellation within the company or group of companies. In this way, entrepreneurs can determine how to act if they are prevented from doing so by an authorised representative. This means that not only is it highly likely that the wishes of the principal will be implemented, but the family is also given a structure within which it can act. This is a great advantage in emotionally stressful phases of life – for the family and for the company.
