Power of attorney form: when is it needed and how to use it?

In their business activities, entrepreneurs often use a power of attorney form. Based on this document, an employee can carry out assignments on behalf of the organization. You can download a ready-made power of attorney template on our website. 

This will help you avoid serious mistakes when drafting and completing the document from scratch. You will only need to enter the details of the principal and the rights delegated to the authorized person. What is a power of attorney template and in which cases can it be used?

What is the power of attorney form M-2?

A power of attorney template is a ready-made standard document form. It is used by an enterprise to transfer rights to a specific employee, for example, to perform certain powers on behalf of the manager.

Since current legislation (Articles 244 and 245 of the Civil Code of Ukraine) imposes increased requirements for the execution and completion of a power of attorney, using a ready-made template significantly reduces the number of possible errors.

The power of attorney form M-2 is a legal instrument that allows a company manager to partially delegate their powers to an authorized person for the receipt of inventory and material assets (hereinafter — IMAs).

In the course of business activities, an enterprise often deals with suppliers of goods or services. In this case, the recipient (or the recipient’s representative) must confirm their authority in documentary form. The supplier company must verify the data in the power of attorney against the recipient’s official identification document (passport, series and number, or another identity document), as well as the delivery note, and then release the IMAs to the representative of the recipient company.

Despite the fact that, according to the Resolution of the Cabinet of Ministers of April 17, 2008, power of attorney forms have lost their status as strict reporting forms, enterprises continue to maintain a register of these documents in the form established by Instruction No. 99.

Why is the M-2 power of attorney required?

Clause 2 of Instruction No. 99 defines specific types of IMAs that may be transferred to the recipient on the basis of a power of attorney:

• securities,
• financial documentation,
• intangible assets,
• fixed assets of the company,
• goods and tools,
• fertilizers, seeds, livestock,
• inventory, spare parts,
• fuel, raw materials, etc.

For the recipient company, this document confirms the principal’s decision to delegate authority to a person for receiving a specific list of assets.

For the supplier company, this document is the basis for transferring inventory and material assets to the recipient. Without an M-2 power of attorney, the supplier has no right to issue and sign delivery or transport documents for the release of IMAs, and therefore the business transaction cannot be completed.

When is the power of attorney form M-2 issued?

The document is prepared and completed by the company manager in order to receive IMAs. It does not matter under which contract the transfer of assets will take place — lease, repair, storage, or purchase and sale.

The recipient company issues the power of attorney, and the supplier company receives a document on the basis of which it may release:

• equipment after repair (Letter of the Ministry of Finance of Ukraine No. 31-04200-30-5/7021 dated December 9, 2003);
• containers for return or products for further safekeeping (Letter of the Ministry of Finance of Ukraine No. 04220-92 dated July 30, 2003);
• inventory and material assets within the framework of a joint activity agreement;
• tolling raw materials for further processing;
• shares and securities (Letter of the Ministry of Finance of Ukraine No. 061-303/11-2263 dated April 28, 2001).

In which cases is the M-2 power of attorney not required?

A power of attorney is not required in all cases:

1. Receipt of IMAs with cash payment, as well as receipt of assets from a private entrepreneur.
2. Purchase of IMAs personally by an entrepreneur on the basis of a passport or another identity document.
3. Purchase of IMAs personally by the company manager or another authorized person who may act without a power of attorney.
4. Receipt of IMAs by an individual if they are the final consumer of goods or services.
5. Internal movement of assets within the organization, when IMAs are transferred between employees working in the same company.

Who may issue a power of attorney form M-2?

According to Instruction No. 99, the power of attorney in standard form M-2 may be completed by company officials who have such authority, as well as by employees who:

• have this right under their job description,
• were appointed by the company director to register and issue powers of attorney, including those that were used or returned to the enterprise.

Rules for registering a power of attorney form M-2 at an enterprise

Every enterprise conducting business activities keeps a Power of Attorney Register. The registration form is provided in Appendix 2 to Instruction No. 99. The chief accountant binds the register, numbers the pages, and certifies them with the signature and seal of the company director.

For powers of attorney that have been returned, the chief accountant makes the note “not used.” After that, the document must be stored for the period established for primary accounting documents, in accordance with the Order of the Ministry of Justice No. 578/5 dated April 12, 2012.

Follow the rules for registration, issuance, and storage of power of attorney forms, because if it becomes necessary to prove the fact of acquisition of IMAs from the supplier company, copies of the register pages will be the key argument in your favor.

What data must be entered into the M-2 power of attorney form?

The supplier company will not be able to release assets to the authorized person if it finds errors in the document, such as corrections or erasures, incorrectly completed details, incorrect personal data of the recipient’s representative, or missing signatures.

Fill in all details carefully and do not forget to indicate in the “Identity document” line the passport details of the authorized person. When receiving IMAs, the representative of the recipient company must present this document for verification. Its details must fully match those specified in the power of attorney form.

When completing the fields of the power of attorney, the following must be entered:

• name of the recipient company, EDRPOU code, settlement account of the paying organization, bank details;
• validity period of the power of attorney;
• form number and date of issue;
• exact name of the IMAs;
• quantity of assets in natural terms;
• units of measurement (pieces, sets).

The document must bear the signatures of the company director and the chief accountant or other authorized officials.

Is a company seal required on the M-2 power of attorney?

A seal is a mandatory requisite when certifying the document, according to Appendix 1 to Instruction No. 99.

However, this rule does not apply to entrepreneurs who conduct business activities without a seal (Letter of the Ministry of Finance of Ukraine No. 053-29151 dated October 31, 2000).

What is the validity period of the M-2 power of attorney?

According to clause 8 of Instruction No. 99, the validity period of a power of attorney must not exceed 10 calendar days. However, the final validity period depends on the nature of the receipt of assets. The validity may be extended up to 1 calendar month if:

1. Centralized or circular transportation is used to deliver the IMAs.

2. All settlements related to the receipt and removal of IMAs are carried out on a planned basis.

The validity period of the document expires on the date specified in the corresponding field of the power of attorney form.

Receipt of assets without a power of attorney is considered a violation of accounting rules and procedures.