Authorizing Third Parties With Limited Powers: Proxy Or Registered Authorized Signatory?

Companies, regardless of their types and sizes, often need to appoint individuals other than their board members, to perform certain tasks arising from their day-to-day operations. Under Turkish corporate law system, granting such powers can be done by issuing a power of attorney in favour of someone, or by appointing a person as a registered authorized signatory with limited powers. This article will be outlining the differences between the two, from companies' points of view.

I. Power of Attorney

A power of attorney establishes a contractual relationship between the parties as regulated under the Turkish Code of Obligations No. 6098 ("TCO"). Pursuant to the law, holder of a power of attorney ("proxy") has the following statutory obligations: to comply with the instructions of the issuer of the power of attorney ("grantor"), to execute the acts in person, to adhere to the grantor's instructions, carrying out transactions diligently, and accounting for their