When you require someone to act on your behalf in…
When you require someone to act on your behalf in a business-related matter, you need to issue a formal letter of authorization. These letters grant someone permission to assist you with a financial transaction, or represent you in an official setting.
What is a Formal Letter of Authorization?
A letter of authorization is a document that authorizes someone to act in your place. It requires that you grant permission to your representative or endorse a particular person to make specific decisions on your behalf. This could be dealing with your bills, banking, or anything else that is confidential.
A formal authorization letter is specifically intended for legal, business-related decisions. It gives authority to a third party to represent another in business matters. Since they involve business matters, the text should be formal and matter-of-fact. Such letter should carry the signature of both parties.
When do you Write a Formal Authorization Letter?
Formal authorization letters become necessary when circumstances prevent you from completing a specific task independently. Such letters are written to grant permission to someone else to undertake the task.
A formal authorization letter implies that you have legally transferred authority to a third party to perform a task on your behalf. You may want to authorize someone you trust because you’ll be accountable for the actions.
A formal authorization letter is typical in these scenarios;
- Authorizing someone to attend a business meeting to speak on critical financial decisions on your behalf.
- Granting permission to someone to access your bank account; to either withdraw some amount of money or take charge of your account.
- Asking someone to travel on your behalf or pick up some important business documents for you.
- Authorizing someone to take charge of your business or duties; in situations where you are sick or out of town.
Why is a Letter of Authorization Important?
A letter of authorization is a document signed by an individual giving another legal authority to carry out a task on their behalf. Why is it essential to write a letter of authorization?
1. It is a legal document.
A letter of authorization is a legal document that carries the signature of the authorizer and the person assigned to perform specific actions. It shows that a particular individual has permission to incur debt or decide on behalf of another. This letter becomes proof in a court proceeding when a legal issue arises.
An authorization letter confirms that you assigned an individual to carry out a task on your behalf. This way, you are accountable for whatever decision the person makes or action they take. You should assign someone you know to be trustworthy and capable of carrying out the task. For example, an individual can show a formal letter of authorization to a bank to withdraw money from your account. This letter will assure the bank that, indeed, you delegated that person for the task.
3. It tracks accountability
When a formal letter of authorization is given to someone appointed to perform a task on your behalf, they become responsible for the task. A person can easily be tracked and held accountable in case of any mistakes. If such a document is not available, there’s nothing to prove that the person is responsible for the mistakes.
Format of a Formal Letter of Authorization
A letter of authorization is a detailed, legal statement that gives an individual the specific approval they need for a specified task. The format of a formal letter of authorization is as follows:
- Date of the letter
- Authorizer’s address and name
- Name of the person/organization to whom it is written.
- Name and details of the person who has been authorized.
- Reason for unavailability of the authorizer.
- Duration of the authorized letter.
- Action to be done by the authorized person.
- Signature of both parties.
To Wrap Up
A formal authorization letter is a contract between two parties that provides third-party consent regarding a requested action. This document is written in a particular format, and it must be signed by both parties to make it valid. With the guidelines provided in this article, drafting such a letter should be easy.