Powers Of Attorneys In Latin America – Part Of 'La Vida' - Corporate/Commercial Law - Chile Law Articles in English - Mondaq Business Briefing - Books and Journals - VLEX 589781034

Powers Of Attorneys In Latin America – Part Of 'La Vida'

Author:Mr Harris Gomez
Profession:Harris Gomez Group
 
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In comparison to Australia, where Power of Attorneys ("POAs") (ironically referred to in some circles as a "licence to steal") are not an especially common instrument when doing business, Latin America cannot operate without POAs which are part of "la vida". In a direct business culture clash with Australia, parties entering into a contract in Latin America must have express and written authority to do so. The most common instrument of doing this is through the use of a POA. Whilst Board resolutions can be used as an alternative for some functions, this is less common. POAs are typically used for instructing professionals including lawyers, accountants, architects, engineers (although not doctors or veterinarians).

In Chile, all incorporated companies must have a Legal Representative ("LR") who must be a Chilean citizen.  The LR is legally responsible for the company and rights of authority automatically vest with the LR when the company is incorporated. When a company is a subsidiary of an Australian company, it is common for the Australian company to give a POA to the Chilean company's General Manager/"Gerente General" or equivalent, to attend to day-to-day functions in its role for the business.  Such functions include entering into employment contracts, leases of office space and/or buildings or business contracts as well as attending to the company's banking needs.

If an Australian company wishes to grant a POA to a person in Chile, that POA must be signed in front of a Notary Public in Australia, then legalised at the Chilean Consulate and/or authenticated by the Department of Foreign Affairs and Trade (depending on the Treaty with Australia regarding notaries). Once the original is sent to Chile, it then needs to get "locally" legalised and registered. A similar process applies to granting a POA in Argentina, Peru, Colombia and Mexico.

The wider the powers contained in the POA, the more practical it is. However, this has the drawback of...

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