What is the scope of the proxy's activities?

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Running a business may sometimes require assistance - an entrepreneur does not always have the time and possibilities to perform the appropriate activities on time. In this case, a proxy will be helpful. Let's check who he really is and what is the exact scope of the proxy's activities.

Who is a proxy?

Let's start by explaining the concept of commercial proxy. This is a special form of power of attorney that may be granted in connection with running a business. It can, in principle, be established by any person who is subject to mandatory entry in the Central Register and Information on Economic Activity (CEIDG) or in the register of entrepreneurs of the National Court Register (KRS).

Therefore, it follows from the above that persons performing unregulated activity, i.e. not subject to mandatory entry in the CEIDG or KRS, cannot use the assistance of a proxy. The same will be the case with natural persons who also cannot establish a procuration. Then it is only possible to appoint proxies for natural persons.

The judgment of the Supreme Court of 8 March 2017 (file reference number IV CSK 321/16)
It follows from the essence of the commercial proxy that it is a power of attorney granted by an entrepreneur, also referred to as a commercial representation, which includes authorization to perform judicial and extrajudicial activities related to running an enterprise, it cannot, as a rule, be limited to third parties, and legal actions requiring Special powers of attorney are listed in the Act (Art. 1091 and Art. 1093 of the Civil Code).

Features of a proxy

The nature of the proxy is very similar to the power of attorney granted by natural persons. The main difference, however, is that it is directly related to the activities of the designated enterprise. Therefore, it is a form of replacing an entrepreneur in carrying out activities related to running a business for him. Thus, the procuration cannot be established for the so-called dealing with the entrepreneur's private affairs that are not related to his business.

A characteristic feature of a commercial proxy is a fairly wide range of activities of a commercial proxy - they include both judicial and non-judicial activities. In other words, a duly appointed procurator may perform both more and less formal activities, this also applies to matters of an official nature.

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Proxy activities

The scope of the commercial proxy's competence depends primarily on the will of its principal. It is the entrepreneur who decides whether he intends to entrust a third party with the running of his company's affairs in whole or in an appropriate part. In the case of complex and large enterprises (e.g. consortia) it is possible to apply the so-called departmental procuration.

Pursuant to Art. 1095 of the Civil Code, the procuration may be limited to the scope of matters entered in the register of the company's branch (departmental procuration). In the above case, the activities of the proxy will depend on the scope of matters handled by the branch of a given company - therefore they will be limited both in terms of the size and number of problems occurring in a given branch, and in terms of territorial scope (branches of enterprises have a smaller range of influence).

Regardless of how broad the scope of the commercial proxy's competence may be, in certain cases he may perform activities only on the basis of an additional power of attorney of his principal. This special authorization is needed for:

  • sale of the enterprise;
  • perform a legal action on the basis of which the enterprise is transferred for temporary use (e.g. rental, lending);
  • sale of real estate (e.g. by sale or donation agreement);
  • encumbering real estate (e.g. establishing transmission easement).

In the above situations, the commercial proxy may not perform activities without an additional power of attorney, even if the scope of his powers is unlimited. Otherwise, the action taken will be invalid and will not have any legal effects.

Proxy limitations

The scope of the proxy's activities depends, therefore, on the will of the entrepreneur and obtaining an appropriate power of attorney in the event of performing certain activities. It turns out, however, that limiting this form of a power of attorney cannot be effective for third parties (e.g. business partners of the entrepreneur). In this case, it is effective only between the commercial proxy and his principal.

Judgment of the SA in Kraków of March 29, 2019 (file reference number II AKa 241/17)
Pursuant to Art. 1091 § 2 of the Civil Code, the procuration may not be limited with effect against third parties, unless a specific provision provides otherwise. The restrictions are effective only in the relationship between the principal and the proxy and may lead to the commercial proxy's liability for damages, but the actions performed by him on behalf of the principal remain valid. Possibilities of limiting the procuration under Art. 1094–1095 of the Civil Code are irrelevant in the case under examination. Proxies represent the company in accordance with the provisions on commercial power, with only restrictions resulting therefrom, therefore, regardless of the manner of representation applicable in the company […].

The commercial proxy is obliged to deal with the principal's affairs and must act in his favor and in his interest. Abuse of rights means using them for purposes other than those granted.

We should remember that the commercial proxy does not have to undertake his activities independently. Firstly, the entrepreneur may grant such a power of attorney to several people at the same time - then we are dealing with the so-called joint proxy. It is also possible that the commercial proxy will appoint his own representative to perform specific activities. In this case, however, it cannot be a general authorization, i.e. to all activities to which the proxy himself is entitled. An attorney should be appointed only to perform a designated activity or activity of a certain type. Obviously, granting the above-mentioned power of attorney is limited to the scope of authorization of the proxy itself. In other words, the commercial proxy may not allow a third party to perform an action that he could not have taken himself.

Termination of the procuration

The authorization to perform activities under the granted procuration shall expire with:

  • with the death of a procurator,
  • with the declaration of bankruptcy of the enterprise,
  • with the opening of the liquidation of the enterprise,
  • with removal of the entrepreneur from CEIDG or KRS,
  • with the transformation of an entrepreneur (e.g. sole proprietorship into a commercial company).

As you can see, the activities of a commercial proxy cannot relate to cases related to the closure of a specific business activity, if it occurs as a result of the declaration of bankruptcy or liquidation of the company. In these cases, the procuration expires by virtue of the law itself.

Summary

The scope of the proxy's activities depends on two factors - the will of the entrepreneur and the provisions of the Civil Code. A proxy may be appointed to perform virtually all activities related to running a business and only for one specifically designated activity. Regardless of how broad a proxy is, it does not entitle you to deal with matters related to the liquidation or declaration of bankruptcy of the entrepreneur. In the event of the sale of the enterprise, the performance of a legal act on the basis of which it is commissioned for temporary use, as well as for the sale and encumbrance of real estate, the proxy must have an additional power of attorney for a particular action.