What is a commercial proxy and who appoints a commercial proxy?

Piotr Kłodziński|
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Reflecting the organization of the internal structure of capital companies in the most synthetic way possible, it is necessary to point out a certain dualism, expressed in the separation of managerial bodies (the company's management board) and those of an ownership nature (the shareholders' meeting). In order to ensure the effective functioning of the company by expanding the entities authorized to represent it, companies decide to grant a commercial power of attorney - which results in the appointment of a commercial proxy in the company. That is, a person who, pursuant to the power of attorney granted to him, is authorized to represent the company. Proxy may also be granted by entrepreneurs running sole proprietorships. 
 
Law Office of Piotr Kłodziński what he does every day legal services for companies and companies from Warsaw – if necessary, we will be happy to help, including in appointing a proxy and obtaining an entry in the appropriate register.

Later in this article you will read:

  • What is a commercial proxy?
  • Proxy and power of attorney – scope of commercial representation
  • Who can be a proxy?
  • Types of commercial power of attorney
  • Who appoints a proxy?
  • Entry in the National Court Register
  • How much does it cost to appoint a proxy?
  • Expiry and revocation of commercial power of attorney

What is a commercial proxy?

A commercial proxy is a special type of power of attorney, the literature indicates the specificity of its shape in the context of adapting this power of attorney to the specific nature of business activity.

Broadly speaking, a commercial proxy is a power of attorney granted by an entrepreneur who is subject to entry in the Central Registration and Information on Economic Activity or in the register of the National Court Register - as is the case with a limited liability company.

The institution of commercial power of attorney has its roots in the interwar period, when it was originally regulated in the Commercial Code of 1934. Interestingly, the provisions relating to commercial representation - despite the repeal of the act itself - were in force until the entry into force of the amendment to the Civil Code of February 14, 2003. Due to its origins, commercial power of attorney is also referred to as "commercial power of attorney".

Currently, the institution of commercial power of attorney is regulated by the provisions of section VI "Representation", chapter III "Proxy" of the Civil Code (hereinafter referred to as the Civil Code). Due to the wide range of organizational and legal forms of running a business and the differences in the internal structure of individual organizational units, in order to properly grant a commercial power of attorney, it is necessary to take into account - in the case of a limited liability company, which is the subject of this article - the regulations of the Commercial Companies Code (hereinafter referred to as the Commercial Companies Code). , specifying which authority is competent to grant or revoke the commercial power of attorney. Legal services for companies in Warsaw This is just one of the areas of law that ours deals with Law Firm.

Proxy and proxy – scope of commercial representation

As indicated above, due to the specific nature of commercial power of attorney, legal provisions regarding power of attorney shall apply to commercial power of attorney, provided, however, that the regulation on the obligation to grant a power of attorney in a special form will not apply if a special form is required for the validity of a legal act (Article 99 § 1 of the Civil Code), because the commercial power of attorney is granted in writing under pain of invalidity. The notarial form is also often used.

The scope of commercial power of attorney results from the regulations. It covers judicial and extrajudicial activities related to running a business.

It is worth emphasizing the functional connection between the activities undertaken by the entrepreneur's representative and the running of the enterprise, i.e. the commercial proxy gives him the authority to take all actions aimed at maintaining the business activity. This remark is important because the Civil Code in some way limits this undoubtedly broad authorization by enumerating activities that do not fall within the scope of commercial representation and for which a special power of attorney is required to be legally effective.

The establishment of negative limits of commercial power of attorney is based on the indication of activities that, in their essence, directly or indirectly lead to the disposal of the enterprise, preventing its use or limiting or actually preventing the activity using the enterprise.

Important! According to art. 1093 of the Civil Code, the requirement to grant a special power of attorney applies to the following activities:

  • performing a legal act pursuant to which it is put into temporary use,
  • selling and encumbering real estate.

If the entrepreneur's representative performs the above-mentioned activities without prior granting a special power of attorney, such an activity will be subject to the sanction of suspended ineffectiveness (Article 103 of the Civil Code) or the sanction of invalidity (Article 104 of the Civil Code).

The wide scope of commercial power of attorney is additionally confirmed by the jurisprudence of administrative courts in tax matters. The above is visible in the context of granting a power of attorney to sign a tax return. It is worth pointing out that the Tax Ordinance (hereinafter referred to as OP) treats the power of attorney to sign a tax declaration as a special type of power of attorney, which is submitted to the tax authority competent in matters of tax to which a given declaration applies (Article 80a § 2 of the Tax Code).

Even though the provisions regarding power of attorney in tax proceedings apply accordingly to the said power of attorney, due to the fact that the above-mentioned Art. 80a op has a special character compared to art. 138d of the Act regulating the general power of attorney to act in all tax matters and other matters falling within the competence of tax authorities - in accordance with the interpretative directive, the special provision repeals the general provision (Latin: lex specialis derogat legi generali) - the general power of attorney does not authorize to sign tax returns. As the jurisprudence indicates, these regulations do not apply to commercial proxies. Establishing a proxy excludes the need to grant the proxy a general power of attorney in tax matters, or even a power of attorney to sign tax returns, and therefore a proxy covers both a general power of attorney to act in all tax matters and a power of attorney to sign a tax return.

Judgment:
"It is impossible to accept as justified the position that a proxy does not have the authority to act in proceedings initiated by an application for an overpayment and to sign a correction of the declaration, without presenting a specific power of attorney in this respect. Such authorization results from the essence of commercial power of attorney and does not require that such an attorney have to hold an additional power of attorney granted under Art. 80a op”
Judgment of the Provincial Administrative Court in Lublin of February 20, 2018, file reference number I SA/Lu 1047/17

Important! As a rule, commercial representation cannot be limited with legal effect towards third parties. Pursuant to Art. 1091 § 2 of the Civil Code, commercial power of attorney cannot be limited with effect towards third parties, unless a specific provision1 provides otherwise.

The restrictions are effective only in the relationship between the principal and the proxy and may lead to the proxy's liability for damages, but the actions performed by him on behalf of the principal remain valid.

A special provision limiting commercial representation towards third parties is the provision regulating the institution of branch commercial representation (Article 1095 of the Civil Code). A branch commercial power of attorney is a power of attorney that includes authorization to deal with matters entered in the branch's register. The said legal structure will be particularly applicable to large-scale business activities, where there is an extensive structure separating internal organizational units.

Interestingly, a similar regulation can be found in Art. 204 § 2 of the Commercial Companies Code, which prohibits limiting the right of a management board member to represent the company with legal effect towards third parties.

Who can be a proxy?

The legislator places the basic requirement for a proxy in the context of the attribute of legal capacity (this attribute consists of gradations - full legal capacity, limited legal capacity and lack of legal capacity are distinguished)2. A natural person with full legal capacity may be a proxy. Against this background, we can observe an important difference between a power of attorney, where the representative is not required to have full legal capacity.

Full legal capacity is acquired upon reaching the age of majority, and limited legal capacity should be understood as minors who are over thirteen years of age and partially incapacitated persons.

At the same time, it is worth pointing out certain subjective restrictions in relation to commercial proxies - the general provisions of the Commercial Companies Code introduce a ban on holding the position of commercial proxy by persons convicted by a final judgment for certain economic crimes. Moreover, special provisions relating to limited liability companies prohibit combining the function of a member of the supervisory board or audit committee with the function of a commercial proxy (Article 214 § 1 of the Commercial Companies Code).

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Who appoints the proxy?

In capital companies, which include a limited liability company, the appointment of a proxy takes place in two stages. Establishing a commercial power of attorney and granting a commercial power of attorney require a clear distinction.

Establishing a commercial power of attorney

Pursuant to Art. 208 § 6 of the Commercial Companies Code, the appointment of a commercial proxy requires the consent of all members of the management board. The above consent takes the form of adopting a resolution of the management board. This provision is dispositive (or binding), which means that the company agreement may provide for different regulations regarding the manner of establishing a commercial proxy.

Granting a commercial power of attorney

The next step after establishing a commercial power of attorney by adopting a resolution of the management board is to grant a commercial power of attorney. The granting of a commercial power of attorney in accordance with the previously mentioned provisions of the Civil Code should be made in writing. Failure to comply with the said form results in the invalidity of the legal transaction. The written granting of a commercial power of attorney should be signed in accordance with the principles of representation adopted by the company.

The situation is slightly different in the case of a limited liability company with a single-person management board. In view of the internal organizational structure shaped in this way, in principle3, the distinction between the stage of establishing and granting a commercial power of attorney is irrelevant, because there is a subjective identity in terms of the persons competent to undertake these activities.

It should be noted, however, that the company agreement in the case of a single-person management board may provide for additional requirements in the form of shareholders' participation in the procedure of appointing a commercial proxy; on the basis of such contractual provisions, the two-phase nature of appointing a commercial proxy is updated.

Types of commercial power of attorney

Due to the criterion of the number of people authorized to represent the entrepreneur and the need for their cooperation in the performance of this representation, we can deal with an independent commercial power of attorney (single or separate) and a joint commercial power of attorney.

In the context of the distinction between independent and joint commercial power of attorney, case law indicates the presumption of representation resulting from the signature of the commercial proxy.

Judgment:
"Under Art. 1091 of the Civil Code, the commercial proxy authorizes all judicial and non-judicial activities related to running an enterprise, except for the exceptions expressly indicated in Art. 1093 of the Civil Code. Proxy may be granted to several persons jointly or separately (Article 1094 of the Civil Code). Therefore, the signature of the commercial proxy under the contract creates the presumption that he was authorized to perform this activity as a separate commercial proxy, and the signature of two commercial proxies leads to the presumption that they were granted joint commercial power of attorney.
Judgment of the Court of Appeal in Kraków of October 5, 2018, file reference number I ACa 1646/17

Joint commercial power of attorney may take the following configurations:

  • authorization to cooperate with another proxy,
  • authorization to cooperate with another proxy or member of the management body (mixed proxy) and
  • authorization to cooperate only with a member of the management body (inappropriate joint commercial power of attorney).

Improper joint commercial power of attorney was introduced into the legal order by virtue of an amendment that entered into force on January 1, 2017. Until then, this method of representation was the axis of the dispute in both doctrine and jurisprudence, and against the background of these ambiguities, the enlarged panel of the Supreme Court considered the legal issue of the admissibility of entering an improper joint commercial proxy in the register. Interestingly, in a resolution of a panel of seven judges, which has the value of a legal principle, the Supreme Court stated that it is inadmissible to enter one proxy in the register of entrepreneurs in the National Court Register, provided that he can only act jointly with a member of the management board. Due to the established practice of registry courts registering improper joint commercial power of attorney, the legislator decided to add Art. 1094 § 11 of the Civil Code. The above-mentioned resolution has only historical significance, because the legal justification for such a position was the lack of regulation of joint commercial power of attorney, which was inappropriate at the statutory level, which, however, became obsolete after the amendment to the Civil Code entered into force.

It should also be noted that joint commercial representation and the related obligation to cooperate apply to active representation - submitting declarations of will on behalf of and for the benefit of the principal. However, the issue of passive representation (acceptance of declarations of will) in the case of joint commercial power of attorney is regulated by a legal provision according to which statements addressed to the entrepreneur or delivery of letters may be made to one of the persons to whom the commercial power of attorney was granted. Therefore, despite the existence of an obligation to cooperate between the entrepreneur's representatives (joint commercial representation), in a situation where, as indicated in the doctrine of Art. 1094 § 2 of the Civil Code seems to be absolutely binding, therefore any provisions to the contrary are treated as invalid.

Entry in the National Court Register

Due to the special type of power of attorney, i.e. commercial power of attorney, the legislator established the requirement to report the granting and expiry of commercial power of attorney to the National Court Register. Such notification should be made within 7 days of appointing a proxy, on the KRS-Z3 form, to which the completed KRS-ZL form should be attached. The application should be submitted to the registry court competent for the company's registered office, only electronically. It should also be noted that, pursuant to Art. 19a § 5 of the National Court Register Act, the application for the registration of a commercial proxy must be accompanied by a declaration of this person, including consent to his appointment and his address for service.

It is also worth emphasizing that despite the existence of a statutory obligation to disclose the circumstances of appointing a commercial proxy in the appropriate register, this entry is only of a declaratory nature - confirming the existing factual situation, because a commercial proxy can effectively perform its function from the moment of its appointment by the company's management board.

Judgment:
“The proxy is valid even though it has not been entered in the court register. However, entry in the register is important from the point of view of certainty and security of legal transactions for two reasons. Firstly, it is connected with the presumption of validity of granting commercial power of attorney, resulting from Art. 17 section 1 of the Act on the National Court Register. Secondly, the commercial representative has the opportunity to effectively identify himself with a copy or extract from the court register. This applies both to the proxy's participation in business transactions and in proceedings before the court, as the proxy should, at the first procedural step, attach to the case file a copy or extract from the court register, which replaces the one required from the proxy - in accordance with Art. 89 § 1 of the Code of Civil Procedure – procedural power of attorney.”
Judgment of the Supreme Court of October 20, 2005, reference number II CK 120/05

How much does it cost to appoint a proxy?

Registration fees are associated with the obligation to report to the register the circumstances of granting (and expiring) a commercial power of attorney. The fees that the company (or more precisely, persons authorized to represent it or the company's management board) must pay when submitting an application for entry in the National Court Register are PLN 250 as a court fee and PLN 100 for publishing information in the Court and Economic Monitor.

Expiration of commercial power of attorney

According to the Civil Code, commercial power of attorney expires as a result of: 1) deletion of the entrepreneur from the register (in the case of a limited liability company, it will be deletion from the National Court Register), 2) declaration of bankruptcy, 3) opening of liquidation, 4) transformation of the entrepreneur, 5) appointment of a curator4, 6 ) death of the proxy.

4 Pursuant to Art. 42 of the Civil Code, the court appoints a guardian of a legal person in a situation where it cannot be represented or conduct its own affairs due to the lack of a body or the lack of a body authorized to represent it. The curator is subject to the supervision of the court that appointed him, his task is to represent the legal person and manage its affairs within the limits set by the certificate of the court appointing him, until the composition of the body is appointed or supplemented or a liquidator is appointed. Due to the scope of the curator's powers, which are identical to the powers of the company's attorney (proxy), the commercial power of attorney expires. During the period of guardianship, commercial power of attorney cannot be established.

It is also worth pointing out the actual situations which the Civil Code does not link with the expiry of commercial power of attorney. First, it is the death of the principal. Secondly, the principal loses his legal capacity.

Judgment:
"Pursuant to Art. 1091 § 1 of the Civil Code, a commercial proxy is a power of attorney granted by an entrepreneur subject to entry in the register of entrepreneurs, which includes the authorization to perform judicial and extrajudicial activities related to running the enterprise. Pursuant to Art. 1097 § 2 of the Civil Code, the commercial proxy expires as a result of deleting the entrepreneur from the register, as well as declaring bankruptcy, opening liquidation and transforming the entrepreneur. The commercial power of attorney expires upon the death of the commercial proxy (§ 3). The death of an entrepreneur or his loss of legal capacity does not result in the expiry of the commercial power of attorney (§ 4). The above-mentioned provision directly indicates five cases of expiry of commercial power of attorney and two factual situations when the commercial power of attorney does not expire. This is the death of the entrepreneur and his loss of legal capacity. Therefore, the loss of the management board by the Company does not result in the expiry of the commercial power of attorney. A proxy is authorized by law to represent the Company in judicial and extrajudicial matters related to running the enterprise.
Judgment of the Supreme Administrative Court of November 29, 2019, file reference number I GSK 257/17

Judgment:
"The provisions of law do not exclude the possibility for an effectively appointed autonomous commercial representative to exercise his/her rights in the field of representing the principal who is a legal person, during the period when the grantor of the commercial proxy does not have any management board."
Judgment of the Provincial Administrative Court of February 7, 2017, file reference number I SA/Kr 1173/17

Regarding the revocation of commercial power of attorney, the provisions of the Civil Code provide that commercial power of attorney may be revoked at any time. However, the more precise procedure for dismissing a commercial proxy is specified in the provisions of the Commercial Companies Code, in accordance with Art. 208 § 7, a proxy may be dismissed by any member of the management board - unlike the appointment of a proxy, where the consent of all members of the management board is required.

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