In September of 2009 New York substantially revised its power of attorney laws. These revisions were meant to address abuse in financial and estate planning matters, but also ended up raising a series of questions regarding their effect on business and securities transactions that took place in New York State.
In response New York has again revised it’s power of attorney laws, effective September 12, 2010, but retroactively effective as of September 1, 2009. The most recent revisions (available here) exclude a large number of transactions from the form and signature requirements of the September 2009 revisions. Some of the exclusions that you may find most relevant include powers of attorney:
- given to or for the benefit of a creditor in connection with a loan or other credit transaction;
- given to facilitate transfer or disposition of securities or other assets;
- given as a proxy or other delegation to exercise voting or management rights;
- created on a form prescribed by a governmental agency;
- authorizing a third party to prepare, execute, deliver, submit and/or file a document or instrument with a governmental agency (such as a power of attorney used to file a report or registration statement with the Securities and Exchange Commission);
- authorizing a financial institution and its employees to take action with respect to a principal’s account;
- given by an individual seeking to become a director, officer, shareholder, employee, partner, limited partner, member, unit owner or manager of a legal or commercial entity in their capacity as such; or
- contained in a partnership or LLC operating agreement, a declaration of trust or other agreement or instrument governing the internal affairs of an entity authorizing a person to take lawful action relating to such entity.
For a complete list of all of the powers of attorney excluded from the revised law see Section 1501-C of New York’s General Obligations Law.