Many of our clients, especially during the holiday season, consider outsourcing some of their company's tasks to third parties. Appointing a second management board member, a proxy, or a commercial proxy is most often considered. Is it worth appointing a commercial proxy? Who is a commercial proxy and what are their powers? We'll answer these and other questions in today's post from our Compliance series.
The concept of power of attorney
A commercial power of attorney is a special type of power of attorney granted by an entrepreneur subject to mandatory entry in the Central Registration and Information on Business or in the register of entrepreneurs of the National Court Register, which includes the authorization to perform all judicial and extrajudicial acts related to running the business .
Considering the above definition, it is impossible not to notice the broad scope of powers granted under a power of attorney. A power of attorney cannot be limited with effect towards third parties or granted only for the performance of certain activities. Therefore, any action taken by a proxy, except for those reserved by law and contrary to the will of the management board, will have binding legal consequences for the company.
Who can become a proxy?
A commercial proxy can be any natural person with full legal capacity . Legal regulations do not impose any qualification or educational requirements on a commercial proxy. Nevertheless, it's important to choose someone who possesses company management skills and at least basic knowledge of commercial law.
Appointment of a commercial proxy – appointment and granting of a commercial proxy
Distinguishing between the concepts of establishing and granting a power of attorney is difficult and often leads to refusal to enter a proxy in the commercial register. Establishing a power of attorney is a part of the company's internal relations and is an act preceding its granting . In partnerships, the decision to establish a power of attorney is made by a resolution of the partners, while in limited liability companies, the management board appoints the proxy by a unanimous resolution. Once a power of attorney is established, actions related to granting it to a specific person can be taken. Granting a power of attorney is an act that produces external effects and is conducted in accordance with the company's established rules of representation.
Example:
The management board of a limited liability company consists of three members: the president of the management board, authorized to represent the company individually, or members of the management board authorized to represent the company jointly. A resolution to appoint a power of attorney is adopted by a unanimous resolution of all members of the management board . Power of attorney is granted by the president of the management board alone or by two members of the management board acting jointly.
A power of attorney must be granted in writing, otherwise being null and void. The provisions concerning power of attorney exclude the requirement for a specific form of power of attorney required for the validity of a given legal act. Therefore, a proxy may perform acts requiring a specific form, such as a notarial deed or subject to a notarial signature.
Powers of proxy
As indicated above, a commercial proxy has the right and obligation to perform all judicial and extrajudicial acts related to the principal's enterprise. However, the scope of this authority does not cover all activities related to the company's operations. A power of attorney for each specific act is required to sell the enterprise, to execute a legal act granting it temporary use, and to sell and encumber real estate. It is worth noting that despite extensive powers of representation, the commercial proxy is not granted the authority to appoint another attorney. Furthermore, under bankruptcy law, the commercial proxy does not have the standing to file a petition for the company's bankruptcy.
Types of power of attorney
Among the types of commercial power of attorney, we can distinguish sole commercial power of attorney and joint commercial power of attorney (including proper and improper joint commercial power of attorney). Sole commercial power of attorney, also known as independent commercial power of attorney, allows a single proxy to independently perform judicial and extrajudicial acts. Joint commercial power of attorney requires the proxy to act jointly with another proxy . The admissibility of improper commercial power of attorney has been questioned for many years in both legal doctrine and case law. Ultimately, the legislator decided to introduce provisions into the legal system explicitly stipulating the permissibility of establishing improper commercial power of attorney, authorizing the proxy to act with another proxy, a member of the management body, or a partner in a commercial partnership .
Revocation of a proxy
A commercial proxy can be appointed for a fixed or indefinite . However, a commercial proxy can revoked in any form at any time (though, as the revocation of a commercial proxy must be reported to the registry court, it is advisable to do so in writing). Furthermore, while the appointment of a commercial proxy requires the consent of the entire management board, any member of the management board may revoke the commercial proxy individually. Commercial proxy may also expire. This occurs upon the death of the commercial proxy, as well as upon the deletion of the entrepreneur from the Central Registration and Information on Business or the Register of Entrepreneurs of the National Court Register, the declaration of bankruptcy, the commencement of liquidation, or the transformation of the entrepreneur.
Due to the broad scope of powers granted to a commercial proxy by law, it is worth considering appointing a commercial proxy in the absence of the management board. The institution of a commercial proxy will ensure the efficient conduct of the company's day-to-day operations and the performance of necessary management duties during the period when the company is without a representative.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of July 19, 2022
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