What is the Meaning of POA?
A Power of Attorney (POA) in Kenya is a legal authority that empowers one individual, known as the (principal), to appoint another individual, an agent, to act on their behalf.
This authority can be unlimited or limited, allowing the agent to make decisions for the principal in legal, business, financial, or health-related matters.
This includes handling transactions, managing property, signing documents, and other tasks designated by the principal.
Power of attorney in Kenya is a tool that provides a sense of control for individuals who may be unable to manage their affairs because they are not close to their property, illness, or any other circumstances.
FACT 1. Types of Power of Attorney in Kenya
Power of Attorney (POA) is a legal document that allows one person to act on behalf of another in various matters. In Kenya, the types of Power of Attorney include:
General Power of Attorney
A General Power of Attorney grants the agent (the person granted authority) comprehensive power to act on behalf of the donor in various matters. This includes:
- Financial Management: The agent can manage bank accounts, investments, and tax obligations.
- Property Management: The agent may handle real estate transactions, such as leasing or selling property.
- Legal Representation: The agent can represent the donor in legal matters, including filing lawsuits or defending against them.
This type of POA is useful for people who require someone to manage multiple aspects of their affairs over a long time, such as someone living out of Kenya or those with health issues. The authority granted remains in effect until revoked by the donor (person granting the authority) or until the donor’s death.
Limited (or Specific) Power of Attorney
A Limited Power of Attorney restricts the agent’s authority to specific tasks or transactions. Examples include:
- Sale of Property: The agent may be authorized to complete the sale of a particular piece of land.
- Business Transactions: The agent can negotiate and conclude a specific business deal.
- Legal Actions: The agent may represent the donor in a single legal case.
Once the specified task is completed, this type of POA automatically terminates. It is ideal for situations where the donor needs assistance with particular issues without granting broad powers
FACT 2. Who Can Make a Power of Attorney in Kenya?
Both mental capacity and age are critical factors in granting Power of Attorney. A person must be of sound mind and at least 18 years old to ensure their decisions are valid and legally binding.
These requirements not only protect individuals but also ensure that the authority granted through a POA reflects genuine intent and understanding, providing a sense of security and protection.
FACT 3. Components of Power of Attorney in Kenya
- Title of the document stating that it is power of attorney
- Date and location
- Identification of the principal (the details include the name, date of birth, address and identification number)
- Identification of the agent (the details include their name, address, and identification numbers)
- Scope of authority
- Effective date
- Signature
- Revocation clause
- Legal compliance
FACT 4. Legal Requirement of Power of Attorney in Kenya
1. Parties
The power of attorney identifies the donor (the person giving the authority) and the Agent (the person receiving the authority)
2. Mental Capacity and Age
Both parties must be of legal age (18 years or older) and of sound mind.
This means they understand the nature of the document and the consequence of the power of attorney, ensuring they are fully informed and knowledgeable about the process.
3. Execution of the document
The donor must sign a power of attorney, which an individual, not a party, must witness.
4. Registration
In Kenya, once the document has been executed, it is presented for assessment at the land registry, and stamp duty is paid before booking the document for registration.
5. Scope of authority
The document should outline whether the authority is general or limited (specific). General power of attorney gives broad power to the agent, while limited authority restricts the agent to specific tasks as provided in the power of attorney.
6. Corporate Power of Attorney
Where a company is involved, additional documents such as the certificate incorporation, article of association and a resolution authorizing a power of attorney to be made on behalf of the company.
7. Revocation Clause
A power of attorney in Kenya should provide provisions that allow the donor to revoke it at any time as long as they are of sound mind. A person who wishes to revoke a power of attorney in Kenya must make a formal request to the registrar by filling out Form LRA 8 and submitting the document for the power of attorney to be legally revoked.
The common authority donated are as follows;
- Signing contracts for Buying, selling and managing real estate
- Signing land transfer forms
- Signing cheques for Managing financial accounts
- Filing returns
- Managing business investment
- Collecting business benefits
FACT 5. Registration Process for Power of Attorney in Kenya
The registration process for a Power of Attorney (POA) in Kenya is crucial for ensuring its validity and legal enforceability. Below are the detailed steps involved in registering a Power of Attorney, including required documentation and associated fees:
Steps Involved in Registering a Power of Attorney
1. Preparation of the Power of Attorney Document
The POA must be drafted clearly, specifying the powers granted to the attorney-in-fact. It should include:
- Full names and addresses of both the donor and the attorney.
- The scope of authority (general or specific).
- Signature blocks for both parties.
- Witnessing: The document must be signed by the donor in the presence of a witness who is not involved in the transaction.
2. Payment of Stamp Duty
Stamp duty must be assessed based on the value of the transactions involved.
Payment
The stamp duty payment receipt must be attached to the POA when submitting it for registration. Payment should be made within 30 days after signing if prepared in Kenya, or within 30 days after receipt if prepared outside Kenya.
3. Submission for Registration
Where to Register-The POA must be lodged at the Registration of Documents Registry in Kenya.
Registration should occur within two months after signing. If signed outside Kenya, it must be registered within two months after arriving in Kenya.
4. Required Documentation
- Full names as per national ID or passport, postal address, telephone/mobile number, and email address of both parties.
- A passport-sized colored photograph of the donor may be required.
- A receipt for stamp duty payment must accompany the application.
- Additional Documents: If applicable, corporate entities must attach copies of their Memorandum and Articles of Association and relevant resolutions.
5. Registration Fees
The registration fee varies depending on the nature and scope of the POA but typically includes:
A basic registration fee (specific amounts can vary).
Possible penalties for late registration if not submitted within the required timeframe (up to ten times the registration fee).
6. Processing Time
Once submitted with all required documents, registration may take less than one hour if everything is in order. However, delays can occur if there are discrepancies or missing information.
7. Post-Registration
After successful registration, the original document is returned to the applicant, and the POA becomes effective immediately.
8. Penalties for Late Registration
If a POA is not registered within two months, fines may apply, and registration could be delayed until payment is made.
By following these steps meticulously, individuals can ensure that their Power of Attorney is valid and enforceable under Kenyan law.
FACT 6. Foreign Power of Attorney in Kenya
For a foreign Power of Attorney (POA) to be recognized in Kenya, it must undergo a specific registration process that ensures its validity and compliance with Kenyan law. Below are the detailed requirements and steps involved:
Requirements for Foreign Powers of Attorney in Kenya
1. Registration Requirement
A foreign POA must be registered in Kenya, even if it has already been registered in its country of origin. This is essential for it to have legal authority within Kenya.
2. Notarization and Authentication
The foreign POA must bear a Notary Public stamp from the embassy or consulate of the country of origin in Kenya. This stamp verifies the authenticity of the document. Any other form of legalization accepted by Kenyan authorities can also be used.
3. Documentation Requirements
The following documents must be submitted along with the foreign POA:
- Full Names and Addresses: The document should include the full names and addresses of both the donor (the person granting the POA) and the attorney-in-fact (the person receiving the authority).
- Scope of Authority: Clearly state whether the POA is general, specific, or irrevocable.
- Signature Block: Both parties must sign the POA, with signatures witnessed by an individual who is not a party to the agreement.
- Tax Payment Receipt: A receipt for stamp duty payment must be attached. The stamp duty is assessed based on the value of transactions involved.
4. Language Translation
If the foreign POA is drafted in a language other than English or Kiswahili, a translation certificate from the embassy or consulate verifying the interpretation must be provided.
5. Submission for Registration
The completed and notarized foreign POA should be submitted to the Registrar of Documents at the relevant registry in Kenya for official registration. This must occur within two months after the document arrives in Kenya.
6. Penalties for Late Registration
If the POA is not registered within two months, penalties may apply, potentially up to ten times the registration fee. The registrar may also delay registration until any fines are paid.
7. Processing Time
Once all documents are submitted correctly, registration may take less than one hour if there are no discrepancies.
FACT 7. Why Use a Power of Attorney?
- Financial management: When the principal is unavailable due to travel, illness, or other reasons.
- Health care reasons: For managing health care and treatment when the principal cannot communicate or make decisions.
- Business transactions: Allowing someone to act on behalf of the principal in essential business matters.
- Aging and incapacity planning: Especially for those planning for potential future incapacity due to age or illness.
A Power of Attorney in Kenya is a powerful legal tool that should be used responsibly. It’s crucial for the principal to fully trust the person they are granting this authority to, as the agent will have significant control over essential aspects of the principal’s life.
FACT 8. When Does a Power of Attorney in Kenya End?
1. Revocation by the Principal
The principal can revoke the power of attorney if they are of sound mind. The revocation is communicated to the agent of the same once the revocation is done.
2. Expiration of Time
The power of attorney ends upon the expiry of the period where the authority was granted.
3. Completion of Purpose
A power of attorney created for a specific purpose ends once the purpose has been fulfilled.
4. Death of the Principal
A power of attorney ends upon the demise of the principal or the donor. The authority granted to an agent is nullified, and an administrator or executor will take charge of the principal estate. A will takes over once a person dies.
5. Death or Incapacity of the Agent
The authority under the power of attorney ends if the agent dies or cannot execute their duties as provided unless an alternative agent is provided in the document.
6. Court Order
A court may revoke a power of authority if it finds that the agent abused their power or is in the principal’s interest. This occurs when an aggrieved party moves to court seeking revocation orders.
FACT 9. How to Revoke the Power of Attorney in Kenya
To revoke a Power of Attorney (POA) in Kenya, the principal (the person who granted the POA) must follow a specific legal process. Here’s a detailed overview of how to effectively revoke a POA:
Steps to Revoke Power of Attorney in Kenya
Draft a Notice of Revocation
The principal needs to create a formal document known as the Notice of Revocation of Power of Attorney. This document should clearly state:
- The full name and address of the principal.
- The name and address of the attorney-in-fact (the person who was granted power).
- A statement that the POA is being revoked.
- The date on which the revocation is effective.
- Sign the Notice
The principal must sign the Notice of Revocation. It is advisable to have this signature witnessed by an advocate or a notary public to ensure its authenticity.
Registration of the Revocation
If the original POA was registered (for example, if it pertains to land transactions), the revocation must also be registered at the relevant registry. This typically involves:
- Filling out Form LRA 8 (for land-related matters) or another appropriate form depending on the type of POA.
- Submitting the signed Notice of Revocation along with any required identification documents.
Documentation Required for Registration
When registering the revocation, you may need to provide:
- A copy of the original Power of Attorney.
- Identification details (ID and PIN) for both the principal and attorney-in-fact.
Any supporting documents that justify the revocation, such as proof of incapacity or death if applicable.
Payment of Fees
There may be registration fees associated with filing the Notice of Revocation. Ensure that these fees are paid to avoid delays in processing.
Notify Relevant Parties
After revocation, it’s crucial to inform all parties that were involved with the original POA, including banks, institutions, or individuals who may have relied on it. This helps prevent unauthorized actions by the former attorney-in-fact.
Keep Records
Maintain copies of all documents related to the revocation for future reference. This includes the signed Notice of Revocation and any correspondence notifying other parties.
Important Considerations
If the POA is irrevocable, it cannot be revoked without mutual consent from both parties involved. This type usually involves some form of vested interest and is often used in specific financial arrangements.
Legal Advice
It’s advisable to consult with a legal professional when revoking a POA, especially if there are complexities involved or if disputes are anticipated.
Challenges
Be prepared for potential challenges from the attorney-in-fact or institutions that may resist accepting the revocation. Having proper documentation and following legal procedures can help mitigate these issues.
FACT 10. Role of Companies in Powers of Attorney
In Kenya, companies can issue or receive a Power of Attorney (POA) to delegate authority to someone else to act on their behalf. Here’s a simple breakdown of how this works, including the necessary steps and documentation involved.
1. What is a Power of Attorney for Companies?
A Power of Attorney in Kenya for companies allows a business to appoint an individual (the attorney-in-fact) to represent it in various matters, such as signing contracts, handling legal documents, or managing transactions. This is particularly useful for tasks like submitting tenders or dealing with regulatory bodies.
2. Issuing a Power of Attorney
When a company wants to issue a POA, it must follow these steps:
a. Prepare the POA Document
- The document should clearly state:
- The name and registration number of the company.
- The name and identification details of the attorney(s).
- The specific powers being granted.
b. Corporate Resolution
A corporate resolution is a formal document that records the decision made by the company’s board of directors to grant the POA. This resolution must be signed by all directors and should outline:
- Why the POA is being issued.
- The specific powers granted to the attorney-in-fact.
3. Documentation Required
To successfully issue a POA, the following documents are typically needed:
- Power of Attorney Document-This is the main document that outlines the powers being granted.
- Board Resolution-A written record of the decision made by the board to issue the POA.
- Identification-ID copies of both the company representatives signing the documents and the appointed attorney(s).
- Company Details-Name, registration number, and address of the company.
4. Signing and Notarization
The authorized signatories (usually directors) must sign the POA in front of a Commissioner for Oaths, Notary Public, or Magistrate. This step ensures that the document is legally recognized.
5. Stamp Duty Payment
After signing, the POA must be presented for stamp duty at the nearest lands registry within 30 days. This involves paying a fee based on the value of transactions involved.
6. Submission to Relevant Authorities
Once registered and stamped, the POA should be submitted to any organization requiring it (for example, government departments or financial institutions).
7. Receiving a Power of Attorney
Companies can also receive a POA from another entity. In this case:
The receiving company must verify that the POA is properly executed according to its jurisdiction’s laws.
It may also require its own corporate resolution to accept and act upon the powers granted in the foreign POA.
8. Importance of Corporate Resolutions
Corporate resolutions are essential when issuing or receiving a POA because they:
Provide legal backing for decisions made by directors.
Ensure that all actions taken under the POA are documented and can be referenced if needed in future audits or legal matters.
Conclusion
Don’t wait until it’s too late to assign a power of attorney. Take proactive steps in managing your future affairs by designating someone you trust to make decisions on your behalf, whether in finance, property or health. Talk to us as we partner with you to secure your future is handled smoothly in unforeseen circumstances.
FAQs
Why you need a power of attorney?
Creating a power of attorney is part of estate planning as it gives you the power to operate even when you lose your ability to function. It is equivalent to implementing effective plans to oversee your affairs even when you cannot do them yourself. Ensure you choose somebody you trust who will faithfully carry out their responsibilities on your behalf.
How long it takes to register a power of attorney in Kenya?
Registration of power of attorney takes a day if all the required documents have been presented at the land registry. The document must be registered within two months, and failure to register within time attracts penalties or fines imposed by the land registrar. Timely registration is crucial for the validity and enforceability of a power of attorney.
Who can revoke the power of attorney in Kenya?
Only the principal has the power to revoke or override a Power of Attorney in Kenya, unless a court intervenes due to specific circumstances like fraud or incapacity. Family members cannot override a POA, and irrevocable powers require mutual consent for any changes.
