You’ve probably heard the term "Legal Entity" countless times, but let’s break it down: it’s not a real person, but an entity (for-profit or nonprofit) formed by one or more people. Essentially, it’s the "legal persona" of your business.
If you own a company and are thinking about investing in real estate so the property becomes part of your assets, this guide is for you! Here’s the "ABC" to make sure you don’t miss any legal details.
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1. Your company’s DNA: The Articles of Incorporation
From the moment your company is formed, it acquires rights and obligations. All of this is set out in the Articles of Incorporation. But keep in mind: your company’s ability to act is limited by its bylaws.
Expert tip: Before you make a purchase, check that your bylaws clearly state that the company has the authority to acquire real estate. If they don’t, you’ll need to make an amendment first.
2. Who signs? The power of representation
Since a company can’t hold a pen by itself, it needs someone to act on its behalf. That’s where the Legal Representative comes in, appointed through a Power of Attorney.
You can complete this process when you form the company or at any time afterward before a notary.
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3. The 3 types of powers of attorney (and which ones you need to buy)
Not all powers of attorney are the same. There are three main types:
Litigation and Collections: For legal matters and debt collection.
Administration: Allows you to manage assets.
Acts of Ownership: The "highest level," allowing the representative to act essentially as the owner.
Which one do you need to buy a property?
Power of Attorney for Acts of Administration: You can buy a property with this power of attorney. But keep in mind that while it allows you to purchase, you can’t sell or donate the property afterward.
Power of Attorney for Acts of Ownership: This is the ideal option. With this power of attorney, the representative can buy, sell, or donate the property without restrictions.
4. Signing day: The final "paperwork"
When the big day comes to sign the deed, remember that your ID alone isn’t enough. You’ll need to include the Articles of Incorporation and the corresponding Power of Attorney in the deed. This proves that the company legally exists and that you (or the representative) are authorized to sign the purchase documents.
Do you still have questions about the process? Investing in your company’s name is a major step toward strengthening your business assets. Tell us in the comments: What other topics about real estate and sales would you like us to explain?