Commercial proxy or attorney-in-fact? Business control in Poland from the perspective of a Spanish investor

A foreign investor operating on the Polish market will quickly encounter the institution of commercial proxy (prokura), i.e. a special type of power of attorney (pełnomocnictwo) unknown to Spanish law. Unlike a standard power of attorney, prokura grants the proxy holder (prokurent) a very broad scope of authority, which cannot be limited with effect towards third parties. This article outlines the key features of commercial proxy under Polish law, highlights the differences compared to a standard power of attorney, discusses the various types of commercial proxy, and then compares these institutions with Spanish corporate representation mechanisms – in particular with the figures of consejero delegado and apoderado.

When to consider appointing a proxy holder

A foreign investor entering the Polish market through a capital company (sp. z o.o. or S.A.) should consider appointing a commercial proxy in the following situations:

• when the members of the management board do not reside permanently in Poland and need a trusted person to handle the company’s day-to-day affairs;
• when swift and flexible action in business transactions is required (e.g. when entering into contracts that are standard for a given type of enterprise) without the need to grant separate powers of attorney each time; and
• when the company wishes to enable a person who is not a member of the management board (e.g. a chief operating officer) to fully represent the company in dealings with contractors, banks and public authorities.

Compared to a general power of attorney (pełnomocnictwo), commercial proxy (prokura) offers a significant advantage in terms of legal certainty – the company’s counterparty can easily verify the proxy holder’s authority in a publicly accessible register, and the broad, statutorily defined scope of commercial proxy eliminates the risk of challenging the extent of the authorisation. From the perspective of a Spanish investor, commercial proxy serves a function similar to that of a consejero delegado with a broad scope of delegation, with the important difference that the proxy holder does not need to be a member of the company’s governing body.

What is commercial proxy and why is it worth distinguishing it from a power of attorney?

Commercial proxy (prokura) is a special type of power of attorney (pełnomocnictwo), distinguished primarily by the limited range of entities entitled to grant it. Only entrepreneurs subject to the obligation of registration in the Central Register and Information on Business Activity (CEIDG) or the National Court Register (KRS) hold this competence.

Under the Civil Code, as a general rule, any legal entity may act as an attorney-in-fact. The fact of possessing full legal capacity is also not relevant, since even limited capacity in this regard does not prevent the effective granting of a power of attorney to a given person.

In the case of commercial proxy, this circle has been significantly narrowed. Only a natural person with full legal capacity may serve as a proxy holder.

Commercial proxy encompasses a very broad and statutorily defined scope of powers vested in the proxy holder, covering all judicial and extrajudicial acts related to the operation of the enterprise. The scope of the proxy holder’s authority, arising directly from the Civil Code (articles 109¹–109⁸ of the Civil Code), is a key feature distinguishing commercial proxy from other types of powers of attorney (article 98 et seq. of the Civil Code), in which the principal independently determines the scope of the attorney’s powers.

Commercial proxy must be granted in written form under penalty of invalidity, similarly to a general power of attorney. Only where a special form is required for the validity of the legal act performed by the attorney (e.g. the sale of shares in a limited liability company requires written form with a notarially certified signature, and the sale of real estate requires the form of a notarial deed), must the power of attorney for its performance also be granted in the same form.

Limitations

A characteristic feature of commercial proxy is that its scope cannot be limited with effect towards third parties. Any internal arrangements between the principal and the proxy holder will therefore bind only the parties to that relationship, but not the counterparties. This is different from a standard power of attorney, where the principal freely determines the scope of the authorisation.

Despite the very broad scope of authority, the legislator has expressly defined a catalogue of acts that the proxy holder may not perform without a separate power of attorney – these are:

• disposal of the enterprise,
• performing a legal act on the basis of which the enterprise is transferred for temporary use, and
• disposal of and encumbering real estate (e.g. establishing an easement).

An act performed by the proxy holder in excess of these limitations is absolutely null and void.

Types of commercial proxy

The Civil Code provides for several types of commercial proxy, which differ in the manner in which the authority is exercised. The choice of the appropriate type of commercial proxy is of significant practical importance, as it determines whether the proxy holder may act independently or requires the cooperation of other persons.

• Sole commercial proxy (single-person, prokura samoistna) is the simplest form – the proxy holder is entitled to independently perform all acts falling within the scope of commercial proxy, without the need to cooperate with any other person. This is a solution providing the highest operational flexibility, but at the same time carrying the greatest risk for the principal, as the proxy holder acts fully autonomously.
• Joint commercial proxy (prokura łączna) requires the cooperation of at least two proxy holders for a legal act to be effectively performed. The principal may specify whether the cooperation of all joint proxy holders is required or whether the action of a specified number of them is sufficient. Joint commercial proxy serves as an internal control mechanism – it increases transaction security at the cost of operational flexibility.
• Mixed joint commercial proxy (prokura łączna mieszana) allows for restricting the proxy holder’s actions to acting only together with a member of the company’s management board. The admissibility of this solution had been a subject of controversy in Polish legal doctrine and case law for years. All academic speculation was put to rest following the amendment to the Civil Code, which entered into force on 1 January 2017, when it was expressly permitted to grant commercial proxy specifying that the proxy holder may perform acts jointly with a member of the managing body or a partner authorised to represent a commercial partnership.
• The Civil Code also provides for branch commercial proxy (prokura oddziałowa), the scope of which is limited to matters entered in the register of a branch of the enterprise. This is the only case in which the legislator permits the territorial and subject-matter narrowing of the scope of commercial proxy with effect towards third parties.

Entry in the register

Commercial proxy is established by means of a unilateral legal act of an authorising nature. Its legal existence is therefore strictly dependent on the submission of an appropriate declaration of intent. The granting and expiry of commercial proxy should be reported by the entrepreneur to the relevant register. However, the entry itself is merely declaratory in nature, meaning that commercial proxy is established at the moment of the proxy holder’s appointment and not at the moment of registration of this information in the register.

Until registration, we are dealing with what is known as unregistered commercial proxy. Acts performed by the proxy holder before entry in the register remain valid. However, this will significantly hinder operational activities, as the counterparty will not be able to verify this fact in the relevant register and will require the presentation of the resolution establishing the commercial proxy for inspection.

Revocation of an attorney-in-fact and a commercial proxy

Both power of attorney and commercial proxy may be revoked at any time. In both cases, revocation constitutes a unilateral legal act of the principal and does not require the consent of the other party.

Importantly, Polish law does not permit irrevocable commercial proxy. This regulation differs from that applicable to a power of attorney, where the principal may waive the right to revoke it, provided that this is justified by the content of the legal relationship underlying the power of attorney. Although legally possible and frequently encountered in complex contractual and transactional relationships, in everyday operational activities this type of irrevocable power of attorney is virtually non-existent.

Liability

The exercise of commercial proxy, as well as a power of attorney, may also entail legal liability. A proxy holder or attorney-in-fact who, in the performance of their duties, causes damage to the principal or third parties, bears civil liability under the general principles of the Civil Code. In relation to the principal, liability is based on the provisions on contractual liability (article 471 of the Civil Code) if the proxy holder or attorney-in-fact and the principal are linked by a legal relationship (e.g. an employment contract, a mandate agreement, a management contract), or on the provisions on tortious liability (article 415 of the Civil Code) if no such relationship exists.

Where the proxy holder acts in excess of the scope of authority (e.g. establishing a mortgage on the company’s real estate without a separate power of attorney), such act is absolutely null and void, and the proxy holder may bear liability for damages towards the third party who suffered loss as a result of entering into the invalid contract.

In the case of an attorney and the consequences of exceeding the scope of authority, the mechanism is different. Such an attorney is referred to as a falsus procurator (article 103 of the Civil Code) and the legal act (e.g. a contract being concluded) will be subject to suspended ineffectiveness rather than absolute nullity. In other words, the principal may confirm such an act, in which case it becomes fully effective. Only the failure of the principal to confirm the act causes it to lapse, and the ostensible attorney is liable towards the third party who was unaware of the lack of authorisation of the ostensible attorney for the damage caused.

It should also be noted that there is a potential risk of criminal liability, arising directly from the Criminal Code (article 296 of the Criminal Code). Acting to the detriment of the principal may lead to liability for the offence of breach of trust if, through the abuse of powers granted or the failure to fulfil an obligation incumbent on the proxy holder or attorney, they cause significant financial damage (exceeding PLN 200,000). Importantly, not only the actual infliction of such damage will be punishable, but also the mere creation of a risk of significant financial damage.

Commercial proxy and power of attorney versus Spanish representation institutions

When analysing the Polish institutions of commercial proxy and power of attorney, it is worth referring to the solutions functioning under Spanish law, which has developed different representation mechanisms in commercial transactions.

Spanish law, governed in particular by the Ley de Sociedades de Capital (Real Decreto Legislativo 1/2010), distinguishes two basic types of company representation: organic representation, exercised by members of the administrative body (administradores), and voluntary representation, carried out by attorneys (apoderados). Within the framework of organic representation, the key roles are played by the figures of consejero and consejero delegado.

Consejero is a member of the Consejo de Administración, i.e. the board administering the company, which must consist of at least three members. Importantly, the consejero alone does not hold individual powers to represent the company. As a general rule, the board acts collectively. However, the articles of association may grant representative authority to selected board members. Resolutions are adopted at meetings with the required quorum and by a majority of votes (depending on the type of company and the articles of association).

Consejero delegado is, in turn, a member of the board to whom the body has delegated some of its competences, enabling them to act independently on behalf of the company without the need to convene a board meeting. This delegation requires a resolution adopted by a two-thirds majority of the board members and the conclusion of a separate agreement specifying the scope of the transferred powers. The consejero delegado may fully and effectively represent the company with effect towards third parties if such competence has been transferred to them and entered in the commercial register (Registro Mercantil).

The apoderado, in turn, is the equivalent of a Polish attorney, a person designated by the administrative body of the company to act on its behalf on the basis of a granted power of attorney (usually notarial). Unlike the consejero delegado, the apoderado does not need to be a member of the administrative body and may be a third party in relation to the company. The scope of their authorisation is strictly defined in the content of the power of attorney and may be freely limited, and these limitations are effective towards third parties, which constitutes a significant difference compared to Polish commercial proxy, the scope of which cannot be limited with effect towards counterparties. Importantly, there are powers that cannot be transferred to an apoderado. These are primarily competences closely linked to the exercise of the function of a member of the administrative body, e.g. the preparation of financial statements.

Polish commercial proxy does not find a direct equivalent in Spanish law. Its closest functional equivalent would be a consejero delegado with a broad scope of delegated powers, although the structural differences remain significant. The consejero delegado acts as a company body within the framework of internal delegation, while the proxy holder acts on the basis of a special statutory power of attorney. The features described above make Polish commercial proxy a specific solution requiring particular attention from foreign investors entering the Polish market.