Limited power of attorney to enter into contracts between the company and a member of the board
In the resolution of January 30, 2019, the Supreme Court, ruling in the composition of three judges, stated that art. 210 para. 1 of the Polish Commercial Companies Code allows shareholders meeting of a limited liability company to grant a limited power of attorney for representation during the conclusion of contracts with the chairman of the management board of the above mentioned company.
Questions in this case were directed to the Supreme Court by the court of first instance, which considered the complaint against refusal to draw up a notarial deed. The reason for the refusal was the notary’s doubts regarding the lawfulness of the broad authorization to represent the LLC in all contracts with its board member. According to the notary, such a power of attorney must be specific, i.e. the proxy may be appointed in this case only to represent the company when entering a specific contract. In addition, the shareholders intended to adopt a resolution under which the chairman of the management board of LLC would be granted with power of attorney to represent LLC, which is also a general partner of a limited partnership when concluding contracts with limited partner of LP, who is also the president of the board of this LLC. Therefore, both contracting parties would be represented by the same person. In this case, the notary also refused to perform a notarial act. The court of first instance had doubts about the interpretation of the law provision by a notary public and addressed the issue to the Supreme Court, indicating, however, that in his opinion the power of attorney to represent the company in contracts with a board member may be not only specific, but also limited (ie limiting the scope authorization to conclude types of contracts), but this can not lead to a situation in which the permanent representative would became the company’s body.
The Supreme Court confirmed the request of the court of first instance, stating that when concluding a contract or during a dispute with a member of the board of LLC, the company may be represented – on the basis of a resolution of the shareholders’ meeting – by a proxy authorized by a limited or specific power of attorney (Article 210 § 1 of the Commercial Companies Code). In addition, expanding the scope of the addressed issue, the Supreme Court pointed out that if a general partner of LP is LLC, on the basis of art. 210 § 1 of CCC, its proxy can not be a person who simultaneously is a limited partner in this LP and a member of the board of LLC being a general partner; such a connection is contrary to the nature of the limited partnership.