In businesses and personal life,it’s a very common situation when

you needs a letter, which authorizes somebody else to act on behalf

of you. In simple language its one person giving permission to
another person to conduct a peculiar action on your behalf. One
common example is collecting some document from government
agency when you are away from location. This is an efficient way for
a senior management to delegate some of the tasks to their
subordinates and also allows to set certain boundaries.