Home > A company’s commercial representative – a few words about a proxy holder
A company’s commercial representative – a few words about a proxy holder
21. December 2022
In the course of running a business, it may be necessary to involve a person whose powers are similar to those of a person holding a leading position in the company. A written power of attorney is usually granted for specific activities, in which the scope of the activities must be clearly indicated.
If the business has special confidence in a given person and wishes to engage them for business-related activities, the most appropriate type of power of attorney is a special type called a commercial proxy (prokura).
This is a special solution regulated primarily under the Civil Code, according to which a commercial proxy is a power of attorney granted by a business and is entered into the Central Registration and Information on Business (CEIDG) or in the Register of Business Entities of the National Court Register (KRS). This power of attorney includes authorisation to perform court and out-of-court activities related to the conduct of the business. In view of the above, the function of a commercial representative is of particular importance in business transactions, as it is possible to present a copy of the CEIDG or KRS entry to prove one’s powers. There is a public guarantee of the accuracy provided for such copies. An ordinary written power of attorney does not have this function.
In a sole proprietorship, a commercial proxy is granted by the business entered in the CEIDG. In a civil partnership, a commercial proxy is granted by the individual partners and not by the partnership itself, which means that legal acts performed by the commercial representative would have legal effect only in relation to that partner and not the partnership or the other partners. In partnerships, the appointment of a commercial proxy requires the consent of all the partners who have the right to manage the company, whereas in capital companies a commercial proxy is granted by all the members of the management board. A commercial proxy must always be granted in writing or it will be invalid. It may be revoked at any time when the sole proprietor or one of the company’s partners issues a statement to that effect. It is also possible for a commercial proxy to designate the commercial representative as a succession manager in the event of the death of the entrepreneur. It is worth noting that in the case of the business owner, their loss of capacity or death does not imply the expiry of the commercial proxy.
The situations in which a commercial proxy expires include: the de-registration of the business from the National Court Register, a declaration of bankruptcy by the company, opening the company’s liquidation, the death of the commercial representative, or the total or partial loss of the commercial representative’s legal capacity.
It is also important to note that a commercial proxy cannot be restricted with effect towards third parties, unless a specific provision provides otherwise.
A commercial proxy extends to all court and out-of-court actions. There is no distinction between transactions in the ordinary course of business and transactions outside the ordinary course of business. The provisions only introduce a few limitations on the power of the commercial representative. A commercial representative must hold a power of attorney for a particular action in the case of disposing of a business, for executing a legal act under which the business is given for temporary use to a third party, and for the disposal and encumbrance of real estate.
A commercial proxy is therefore a perfect solution for those who intend to entrust a large part of the tasks of running a business to a given person, but do not necessarily want to appoint that person as a member of the management board or a partner.
Usually, the most senior positions in a company, e.g. chief accountants, general managers or sales directors, are appointed as commercial representatives. Giving such broad powers means that a high degree of trust is placed on a commercial representative by the board members or shareholders.