Who is a commercial proxy and what do they do?
A common perception is that a company is represented by the management board, but hardly anyone is familiar with the function of a commercial proxy.
By definition, a commercial proxy is a natural person with full capacity for legal acts who acts on behalf of a company under a commercial power of attorney, i.e. a special power of attorney granted by resolution of shareholders or the company’s management board.
A commercial power of attorney authorizes to act in and out of court in respect of running an enterprise, apart from sale, lease or encumbrance of this enterprise or real property. A power of attorney for a specific action is required to sell the enterprise, to perform a legal act under which an enterprise is let it out on temporary use or to sell or encumber a real property.
The first step to appoint a commercial proxy is to grant a commercial power of attorney. At this point, it is worth knowing the types of commercial proxy:
The type of commercial proxy must be determined in a resolution appointing a commercial proxy adopted by the company’s management board or shareholders.
A commercial power of attorney must be granted in writing under pain of nullity, the content of which clearly empowers a proxy to act on behalf of the represented entity and the proxy’s consent is required to grant the commercial power of attorney. Commercial power of attorney is granted for a definite or an indefinite period, in both cases it is possible to revoke it at any time.
Moreover, appointment of a commercial proxy is subject to the obligation to be entered in the National Court Register (KRS). However, an entry in the National Court Register is only a confirmation of granting the commercial power of attorney, the Supreme Court in its decision of 20 October 2005 (file no. II CH 120/05) found that the commercial proxy in the company is valid even if it is not entered in the register.
As a rule, the commercial proxy is authorized to act in and out of court on behalf of the entrepreneur.
The commercial proxy may, among other thigs, represent a company before courts, offices, business partners, sign contracts, place orders, bring legal actions, hire employees (conclude employment contracts), incur liabilities (credits, loans), recognize debts, conclude sale and lease agreements, but in no case can it:
For according to the Commercial Companies Code, only members of the company’s management board are entitled to perform certain acts.
There are also situations in which the commercial proxy expires spontaneously, and these include the death of the proxy, bankruptcy of the entrepreneur, deletion of the entity from the register, transformation or liquidation of the entrepreneur.
Only a natural person with full legal capacity for legal acts may be a commercial proxy and, similarly, only a natural person with full legal capacity for legal acts may become a member of the management board of a limited liability company.
In the justification of the resolution of seven judges of 30 January 2015 (file no. III CZP 34/14), the Supreme court ruled on the inadmissibility of combining the functions of a member of the management board and a commercial proxy. In justification, the Court stated that there are no reasons why the commercial power of attorney should be granted to a member of the management board, because the scope of the commercial power of attorney falls within the scope of the powers of a member of the management board.
Currently, companies are more and more often represented by commercial proxies, as this is a good way to relieve the entrepreneur of a difficult task of managing the company.
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