Business authorization letters are used routinely to grant permission from one person to another during absences from the job due to vacation, travel, or sickness and situations where the supervisor must be absent for special projects. Authorization letters are also issued when an individual cannot attend a meeting, meet with a bank, etc., and must rely on another party to conduct an activity on their behalf. Examples include the signing of real estate documents, picking up passports or birth certificates, and filling power of attorney responsibilities.
This post will describe what a business authorization letter is, how they are used, and provide several templates. Templates are used to ensure consistency and accuracy in a business environment and ensure that all appropriate details are included to avoid any confusion.
What Is a Business Authorization Letter?
A business authorization letter is prepared by one person granting permission for a second person to undertake an action on their behalf. It may be specific to a one-time activity, cover a period of time, or a series of actions. Limits to the level of authorization may be included, i.e., purchasing goods or services exceeding a specified dollar amount.
Using pre-established templates ensures that all of the approved information is included, making the letter official and accepted by people, groups, and organizations that review the letter.
If the business authorization letter is invalid due to missing information, the letter must be corrected and re-signed by the person granting the authorization before it can be presented as an official document.
Purpose of a Business Authorization Letter
There are a variety of situations and reasons why you would want to use a business authorization letter. There are general situations common to many businesses and unique situations that apply to a subset of businesses. The following are typical examples of when a letter may be required:
- Managers and executives who are away from the office, e.g., on business travel or vacation, are not available to sign and approve various documents associated with business activities. They will often delegate these activities while they are away and approve a business authorization letter identifying one of their direct reports to sign and approve documents on their behalf.
- An authorization letter may be provided to the bank, authorizing a spouse, friend, or other family members to sign documents on behalf of a person who cannot be present at the bank for a variety of reasons.
- Business transactions in different cities may require the assignment of authority via business authorization letter to provide the authority for a lawyer, for example, to sign on behalf of their client.
- Delegation of authority from a supervisor to an employee to carry out some activity on their behalf can be handled via a business authorization letter. Purchasing goods, receiving goods, signing checks, and many other similar situations require these letters.
Note: A business authorization letter transfers authority and responsibility to another party. This is an important document and should not be used frivolously by either party.
How to Write a Business Authorization Letter?
It is important to write a business authorization letter correctly and include all of the required information needed by various organizations to honor the authorization. Using templates for your company ensures that everyone follows a similar format and includes all necessary details. Companies may have several templates that are used in a variety of situations specific to your company and requirements.
The following are the steps to follow in preparing a business authorization letter or template:
- Always use letter stock that is preprinted with your company’s name, address, and other details specific to your company. Your template should always reflect your company’s name and address across the top of the page if you are printing on blank paper or to a PDF for sending electronically.
- Place your name, title, and address at the top left side. Use your company’s address for the address which indicates the location of your office. Next, add the date of the letter using the standard format for dates adopted by your company, e.g., dd/mm/yy.
- Add the recipient’s address after the date with their full name, address, and zip
- If you do not know the recipient’s name, you might use “To Whom It May Concern”.
- Add the salutation and follow a formal business approach, e.g., Mr., Mrs., Ms., and their name if known
- Body of the letter should be short and to the point. Avoid adding details that the reader may find confusing and capture the following details:
- a. Include details about the person acting on your behalf, e.g., full name, address, and contact number
- b. Include company identification number if available
- c. Describe what they are allowed to do and/or any limitations. Be precise.
- d. Include the start and end dates for the authorization
- e. If appropriate, describe why you are taking this action of delegating your authority to this person
- Include a closing statement, thank the recipient
- Add a formal closing, e.g., Sincerely
- Add your signature
- Add your full name
There are many different types of authorization letters. A few examples include authorization to:
- Act on behalf of – general
- Bank letters
- Hotel credit card authorization
- Medical
- Salary collection
- Direct deposit
- Background check
- Credit report
- Release of medical records
- Claim letters
- Bank account operation
- Document processing
- Transfer vehicle ownership
- Child traveling alone
- Power of attorney
- Claim birth certificate
- Check book collection
Business Authorization Letter Template
A common letter of authorization is one where a manager authorizes a subordinate to act on their behalf while the manager is away on business or vacation.
[Corporate Letter Head]
[Your name]
[Your corporate address including zip code]
[Your phone number & Email]
[Date]
[Recipients Name]
[Recipients corporate address and zip code]
[Recipients phone and email]
Letter of authorization to act on behalf of [Senders Name]
This letter authorizes [Recipients Name] to act on my behalf, [Senders Name], to manage all aspects of my real estate duties while I am absent. The scope of this letter of authorization includes any normal business dealings with regards to [describe business transactions – e.g., real estate transactions, documents, and client issues].
The authorization to act on my behalf begins on [dd/mm/yy] and ends on [dd/mm/yy]. Please feel free to contact me concerning any questions you may have at [Your phone number].
Sincerely,
[Senders Name]
[Printed Senders Name]
Sample Authorization Letter to Act on Behalf
A common letter of authorization is one where a manager authorizes a subordinate to act on their behalf while the manager is away on business or vacation.
[Corporate Letter Head]
[Supervisors name]
[Supervisors corporate address including zip code]
[Supervisors phone number & Email]
[Date]
[Managers Name]
[Managers corporate address and zip code]
[Managers phone and email]
Letter of authorization to act on behalf of [Supervisors Name]
Dear [Recipients Name], this letter authorizes [Managers Name] to act on my behalf, [Supervisors Name] to manage all aspects of my department while I am absent from the position of [Department Name, title]. The scope of this letter of authorization includes any normal business dealings concerning the department.
The authorization to act on my behalf begins on [dd/mm/yy] and ends on [dd/mm/yy] while I am away on [Vacation, Attending Meetings, Conferences, etc.]. Please feel free to contact me concerning any questions you may have at [Supervisor’s phone number].
Sincerely,
[Supervisors Name]
[Printed Supervisors Name]
Sample Authorization Letter for Business Permit
[Corporate Letter Head]
[Your name]
[Your corporate address including zip code]
[Your phone number & Email]
[Date]
[Recipients Name]
[Recipients corporate address and zip code]
[Recipients phone and email]
Letter of authorization to issue a business permit on behalf of [Senders Name]
Dear [Recipients Name], this letter authorizes [Recipients Name] to act on my behalf, [Senders Name], to issue business permits on my behalf while I am absent. The scope of this letter of authorization includes any normal business permits with regards to [describe business permit transactions – e.g., real estate transactions, documents, and client issues].
The authorization to act on my behalf begins on [dd/mm/yy] and ends on [dd/mm/yy]. Please feel free to contact me concerning any questions you may have at [Your phone number].
Sincerely,
[Senders Name]
[Printed Senders Name]
Key Points
Business letters of authorization are used in many different situations to convey or delegate authority from one person to another. They are often used to delegate responsibility while a supervisor is absent on vacation, attending meetings, special projects, or away on medical leave.
Authorization can be for a specific activity or cover a period of time. It is important to identify the scope of the authority delegated and the period that is covered.
Clearly specifying the scope in a concise manner, along with the name of the person receiving the authority, ensures there is little room for misunderstandings and delays. Signing real estate documents, for example, could delay the completion of the sale if the delegation of business authorization is unclear or inaccurate.
Many businesses will develop several templates covering various types of authorization and delegation. These templates present a professional look and feel and ensure accuracy and details are captured to avoid errors, misunderstandings, and delays.
