In this direction, companies often need to manage a range of lawful and commercial matters remotely, notably when their clients are based abroad. For businesses operating in this region, the power of attorney (POA) is a key tool for agent roles. This allows company representatives, such as directors or board members, to perform essential tasks without being physically present in the country. In this article, we will explore how a POA can be issued in Lithuania, the role it plays in company operations, and what you need to know to navigate the process productively.
What is a Power of Attorney?
A POA is a formal written paper where one individual, known as the grantor, authorizes another person, the agent or representative, to act on their name. According to Article 2.137 (20) of the Civil Code of the Republic of Lithuania, the POA allows the agent to represent the grantor’s interests in dealings with third parties. This legal tool is critical in enabling individuals or businesses to delegate responsibilities without requiring their physical presence.
The Lithuanian Civil Code provides clear guidelines regarding the issuance, rights, and duties of both the grantor and the agent. The POA can be granted for specific actions or a series of tasks, depending on the requirements of the grantor.
Issuing a Power of Attorney
In this direction, the POA is typically drawn up by the grantor. It is vital to notify that, for most purposes, the presence of the representative (the person being granted the power) is not required during the drafting of the document. The key details that need to be included are the agent’s full name, identification number, and place of residence. These details are essential for entering them into the POA.
The supervisory units to issue a POA rests solely with the company’s director or board members, who are empowered to present the organisation in lawful matters.
When is a Notary Required for a Power of Attorney?
While issuing a POA can often be a straightforward process, certain actions require additional formality. Specifically, a notary is needed for situations involving significant legal transactions. According to the Civil Code (Article 2.138), notarial certification is mandatory for actions such as:
- Purchasing involving property: For example, the sale or transfer of estate, where the authority to stand in front of the owner must be verified by a notary.
- Business transferring operations: Certain corporate actions, such as the sale or transfer of shares (especially when the value exceeds 14,500 Euros or when 25% or more of the shares are sold).
- Special authority transfers: If a person needs to transfer rights for handling real estate or dealing with lawful units on their behalf.
In these cases, only the original document or a certified copy will have legal validity, and copies—whether notarized or not—are insufficient.
Notably, Lithuania has a limited number of notaries—just over 250 throughout the country. This situation has prompted the development of electronic services to help streamline the process.
Online Submission of Power of Attorney
One of the more recent developments in this region is the ability to issue a POA entirely online. This system, available through the Register Center’s online platform, allows individuals to create a POA without needing to visit a notary in person. This system is particularly beneficial for foreign clients who are unable to travel to Lithuania.
When is Notarization Not Demanded?
There are situations where a POA can be issued without the need for notarization. For example, powers of attorney granting authorization to:
- Receive correspondence, parcels, or money transfers
- Collect wages, allowances, or pensions
- Access administrative services or public services
- Register or deregister vehicles
These types of powers can be granted through the Registry Center’s online platform. The POA will come into effect once it is registered, which can be done remotely. The process is efficient, and the service typically costs around 3.69 Euros.
How Does Online Registration Work?
To use the online system, both Lithuanian citizens and foreign nationals with appropriate identity documents can register on the Register Center’s platform. An electronic signature is required to complete the process. Notably, users do not have to be in Lithuania to register a POA. This has led to around 10% of powers of attorney being issued from abroad.
Once registered, the POA becomes effective. The platform allows users to verify the existence and content of any POA issued through it, eliminating the need for physical copies.
Validity and Cancellation of a Power of Attorney
A POA in this region is considered invalid unless the date of issue is specified. This ensures that both the grantor and the agent are clear on the timing of the authorization. The POA can be granted for a fixed period, such as a few months or years, or until a specific event occurs (e.g., a change in the agent’s role within the company).
If no expiry date is specified, the document remains valid for one year from the date of issuance.
Revocation of a Power of Attorney
The POA can be revoked at any time by either the grantor or the agent. According to the Civil Code (Article 2.146 Part 1), either party can refuse to fulfill the terms of the agreement. It is important to notify the other party and any third parties involved as soon as possible to ensure that the revocation is effective.
In cases where the grantor or agent becomes disabled or passes away, the POA becomes invalid. Similarly, if the legal entity that issued the POA ceases to exist, the letter will no longer be valid.
Final Thoughts
The POA is an essential legal tool for businesses operating in Lithuania, particularly for those with foreign clients or partners. Whether issued in person or online, the process offers flexibility for companies and individuals who need to handle legal and administrative matters remotely. However, it is crucial to understand when a notary is needed and the conditions for validity, cancellation, and revocation of the document.
For businesses operating in Lithuania, especially those with cross-border arrangements, apprehending the nuances of issuing a POA can simplify many legal processes and avoid potential complications. The online registration system, while still relatively new, offers a valuable solution to businesses looking to streamline their operations in Lithuania.