Responsibilities of a registered proxy

4 min.

According to the Polish Civil Code and the Commercial Companies Code, a registered proxy (prokurent) is a person who has been given the authority to perform legal acts in the name of and on behalf of another entity, such as a business entity or company, in the conduct of business. The function of a registered proxy is to represent the company and undertake various legal actions, such as signing contracts, making declarations of intent or performing other actions, as long as they are related to the day-to-day business.

It should be emphasised that a registered proxy has the right to represent the company in relations with third parties, but does not have the right or the duty to manage the company’s business. Their activities are limited to those related to the day-to-day operation of the company and do not include managing its internal affairs or making strategic decisions. This power can be an important part of a company’s organisation, enabling the efficient representation of the company in its liaising with business partners, customers and public institutions, without the involvement of all the shareholders or management board members.

This means that the registered proxy acts on behalf of the business entity, representing it in legal actions, and the proxy’s actions are entirely related to the interests of the company. In doing so, the proxy is not free to make decisions on their own account – they must comply with the applicable laws and act in accordance with the rules set out in the company’s articles of association and the decisions of the management board.

It is worth mentioning here that a registered proxy may exercise its powers alone, together with another registered proxy or in cooperation with another member of the management board, depending on the content of the articles of association and the management board’s decision in this regard.

It follows from the above that the registered proxy has a very broad range of powers in relation to the exercise of their function. This is crucial, given that the scope of the proxy may not be limited towards third parties, unless otherwise provided for by special provisions. An example of such a limitation is the need to have a power of attorney to carry out certain actions, such as the sale of an enterprise or real estate, which is regulated by law.

It should be emphasised that a registered proxy is not subject to the same liability as a member of the management board, a member of the supervisory board, a member of the audit committee or a liquidator in the context of damage caused by an act or omission contrary to the law or the provisions of the articles of association, in accordance with the provisions of the Commercial Companies Code. In the case of a registered proxy, liability for such acts or omissions is governed solely by the general tort provisions of the Civil Code.

It is worth noting an important difference between a registered proxy and other corporate bodies. The registered proxy, although having broad representational powers, does not have the same legal liability for their actions as other people exercising managerial or supervisory functions in the company. This specific feature is an important element of the organisational structure of companies, reflecting the differences in responsibilities between the various company bodies.

Although it is not possible to limit the proxy’s actions towards third parties, the company can be protected against undesirable actions of a registered proxy by placing additional contractual liability on them. This can be done through the bylaws or rules on performing the position of proxy. In these documents, the company can precisely set out situations in which the registered proxy is required to obtain a resolution or a declaration from the management board.

The company may also regulate issues such as entering into transactions exceeding a certain value, excluding the possibility to sign loan agreements, prohibiting the signing of work regulations or deciding on remuneration. A breach of any of these provisions will render the registered proxy liable to the company.

Given the extensive powers of a registered proxy and the lack of precise rules governing its liability, it is crucial to properly regulate the details of their activities. This provides the company with protection against possible misunderstandings or actions not in line with expectations, while protecting the company’s interests against unwanted actions or the possible incompetence of a registered proxy.

Download “Newsletter No. 5 | 2023” as PDF

Contact us:

Attorney trainee in Poland
Michał Sobolewskii
Attorney at law
ECOVIS Legal Poland
+48 22 400 45 85

More info:

This article is part of the Newsletter No. 5 | 2023.