Power of attorney in a company – types, scope, liability and operating principles

Types of powers of attorney in a company

The scope of a proxy’s authority to represent the company depends primarily on the decision of the principal itself, i.e. the company acting through its competent bodies. The limits of the power of attorney are determined in each case by the operational needs and business model of the company in question.

In practice, this means that a power of attorney may be either narrow in scope, covering the performance of a specific, individually defined act, or broad, allowing for the undertaking of a specific type of action on a recurring basis. Of course, regardless of the type of power of attorney, its scope should always be precisely defined in order to exclude legal risks associated with exceeding the authority granted.

The Polish Civil Code(Article 98) distinguishes between three types of power of attorney:

•    a general power of attorney to represent the company, covering the authority to perform acts of ordinary management,

•    a specific power of attorney (authorisation for acts of a specific type),

•    a power of attorney for a specific act.

General power of attorney – scope and limitations

A general power of attorney to represent a company is the broadest type of power of attorney provided for in the Polish Civil Code. It encompasses the authority to carry out so-called ‘acts of ordinary management’.

But what, in practice, are acts of ordinary management? Legal doctrine rightly points out that “the legislator has not defined the concept of ordinary management. There are also no guidelines as to how this concept should be understood.” (W. Borysiak (ed.), Polish Civil Code. Commentary, 34th ed., 2025). Case law indicates that acts of ordinary management will be typical, day-to-day activities of the company undertaken as part of its market operations, taking into account the nature of the legal act, cost criteria, the principal’s interests, and actions consistent with the principles of sound business management. It is therefore difficult to define in abstracto how ‘acts of ordinary management’ should be understood.

A practical example from Polish case law:

“The concept of acts of ordinary management constitutes a general clause, the scope of which must be defined in the light of the facts of the case. As a general rule, it may be assumed that any act falling within the scope of the principal’s ordinary, day-to-day business constitutes an act of ordinary management. Such an assessment is based on vague criteria, and a considerable number of judicial decisions confirm the difficulties in classifying individual acts on the basis of the criteria presented. The legal status of a given act, as falling within or outside the scope of ordinary management, is strictly dependent on the activities carried out by the principal (judgment of the Polish Court of Appeal in Wrocław, 1st Civil Division, of 12 June 2020, ref. no. I ACa 195/20)”.

It is also worth noting that a general power of attorney must, on pain of nullity, be granted in writing (Article 99 of the Polish Code).

At the same time, a general power of attorney does not authorise the agent to perform all legal acts on behalf of the principal. Pursuant to Article 98 of the Polish Civil Code, it covers only acts of ordinary management. This means that acts exceeding ordinary management, such as incurring significant financial obligations, require the granting of a specific or special power of attorney. In practice, an attempt by a company to grant a power of attorney covering ‘all acts’ will be ineffective in respect of acts exceeding ordinary management, unless they are expressly specified in the text of the power of attorney.

Furthermore, for acts requiring a specific form, such as the sale of real estate, it will be necessary to execute the power of attorney in the form of a notarial deed.

General power of attorney – when is it used?

Another type of power of attorney that may be granted is the so-called general power of attorney. A general power of attorney should specify the type of legal act covered by the authorisation and its subject matter (J. Strzebinczyk, in: Gniewek, Machnikowski, Commentary, 2016). The acts which the company’s representative is obliged to perform may be either acts falling within the scope of ordinary management or acts exceeding ordinary management, provided they are precisely defined in the text of the document.

In business dealings, a general power of attorney is most commonly used for recurring tasks. For example, a power of attorney may authorise the taking out or granting of loans on behalf of the company, or the issuing and guaranteeing of promissory notes. Another example would be the collection of correspondence on behalf of the company.

In the text of the power of attorney, it will suffice to specify the type of legal acts covered by the power of attorney, e.g. concluding property agency agreements. There is nothing to prevent, and in some situations it is even advisable, for the scope of the power of attorney to be further restricted, in particular by specifying the maximum value of the transactions, the circle of counterparties, the duration of the power of attorney, or the requirement to obtain prior consent from the management board to carry out specific actions.

A practical example from Polish case law:

“A general power of attorney should specify the type of legal transaction covered by the authorisation and its subject matter. If the type of legal transaction is not expressly specified in the power of attorney, the rules of interpretation applicable to the interpretation of declarations of intent apply in determining the actual intention of the principal (judgment of the Polish Court of Appeal in Warsaw of 18 April 2012, 6th Civil Division, ref. no. VI ACa 1355/11).

Specific power of attorney – practical application

The final type of power of attorney provided for by the Polish Civil Code is a power of attorney to perform a single act. A specific power of attorney forms the basis for authorising an agent to perform a single, specific legal act. This may concern both acts falling within the scope of a general power of attorney and acts going beyond the scope of ordinary management (W. Borysiak (ed.), Polish Civil Code. Commentary, 34th ed., 2025).

In commercial transactions, the most common instance of a company using a special power of attorney will be when performing an act requiring a so-called qualified form, i.e. the sale or purchase of real estate, a business, etc.

Who is liable for the agent’s acts?

A legal act performed by an agent on the basis of a power of attorney granted by the company will have legal effects directly against the represented company, and not against the agent. This follows directly from Article 95(2) of the Polish Civil Code, according to which a legal act performed by a representative within the limits of their authority has direct legal consequences for the represented party.

A practical example from Polish case law:

“It follows from the very nature of a power of attorney that, in order for an agent’s act performed with a third party (with whom he enters into a contract) to have direct effect on the principal, the agent must declare to the third party that he is acting not in his own name but on behalf of his principal, and must identify the principal. Otherwise, it must be deemed that he acted in his own name and not as the agent of a third party. (Polish Supreme Court resolution of 6 January 1992, ref. no. III CZP 116/91, OSN 1992, No. 7–8, item 125)”

A member of the management board as an agent – is this permissible?

For many years, a controversial and questionable issue was whether a member of a company’s management board could simultaneously act as an agent for the same company.

Currently, the prevailing view in case law is that this is permissible. In a resolution of the Polish Supreme Court dated 24 April 2014 (ref. no. III CZP 17/14), it was held that a member of the management board of a limited liability company, authorised to represent the company jointly with another member of the management board, may be appointed as a proxy for specific types of acts.

The Supreme Court thus confirmed that it is permissible to grant a member of the management board not only a power of attorney to perform a specific legal act, but also a general power of attorney.

Alleged proxy – legal consequences and liability

As noted above, a company’s authorised representative is, as a general rule, not liable to third parties for acts performed on behalf of the company. In practice, however, there are situations where an authorised representative acts:

–    without authority, i.e. without a valid power of attorney, or

–    exceeds the scope of their authority to perform a given act, i.e. performs an act not covered by the power of attorney.

In such cases, the representative is liable to third parties.

The most common situations in which an agent acts without authorisation from the company arise when:

• the power of attorney has not been signed at all,
• the power of attorney has indeed been signed, but not by a person authorised to represent the company, according to the data in the National Court Register (KRS),
• the power of attorney was granted to a person other than the person exercising the power of attorney,
• the power of attorney was not granted in the specific form required for the validity of the act in question; for example, the sale of real estate requires a power of attorney in the form of a notarial deed, whereas the power of attorney was drawn up in simple written form,
• the person who granted the power of attorney on behalf of the company was in a state precluding the conscious or free formation of a decision and expression of will, in particular a state caused by mental illness, mental disorders, or other impairment of mental functions, or was under the influence of factors preventing the conscious formation of a decision.

However, exceeding the scope of authority may occur, for example, when:

• the agent was authorised to conclude a sale agreement for a specified price (e.g. PLN 100,000), but concluded the agreement on other terms material to the scope of the power of attorney, e.g. for PLN 90,000 – if the price was specified as a limit of the authority;
• the agent was authorised to conclude a sale agreement, but in fact concluded a lease agreement, i.e. performed a legal act of a different nature from that covered by the power of attorney.

Setting a deadline for confirming the agreement (Article 103 of the Polish Civil Code)

The situations described will be problematic because it is unclear whether the legal act produces effects vis-à-vis the alleged principal or remains ineffective. In order to reduce uncertainty between the parties, the Polish Civil Code provides for the possibility of confirming an act performed by an alleged agent by the person (company) on whose behalf the contract was concluded. Until such confirmation, the act will be subject to what is known as the sanction of suspended ineffectiveness (Article 103 of the Polish Civil Code). This means that the legal act will not have any effect on the alleged principal until it is confirmed by him. However, upon confirmation, the act will become effective and will produce legal effects from the moment it was performed by the alleged agent (the so-called ex tunc effect).

For example, on 10 January 2026, a representative of Company X entered into a contract on its behalf without having the authority to do so or by exceeding the scope of that authority, and therefore acted as an apparent agent. In such a situation, the contract remains ineffective vis-à-vis the company until it is ratified. If Company X confirms the transaction on 25 January 2026, the contract takes legal effect from the moment of its conclusion, i.e. from 10 January 2026 (ex tunc effect).

A practical example from Polish case law:

“The period until the agreement is ratified is therefore a state of suspension, during which the parties remain bound by the agreement, yet it does not produce the intended legal effects” (judgment of the Polish Supreme Court of 7 October 2010, ref. no. IV CSK 95/10).

Failure by the company to confirm an act

The company may, however, decide not to confirm an act performed by an alleged proxy. In such a situation, the legal act remains ineffective vis-à-vis the company and does not produce any legal effects in relation to it.

At the same time, a statement of confirmation or refusal to confirm may be made in any form, unless specific provisions provide otherwise.

A practical example from Polish case law:

“Since no provision of the Polish Civil Code stipulates that a principal’s declaration of intent to confirm the acts of a fraudulent agent must take a specific form, such confirmation may be made in any form (e.g. orally, or even implicitly), judgment of the Polish Court of Appeal in Warsaw, 1st Civil Division, of 23 May 2014, case no. I ACa 1793/13).”

The exception arises from Article 63 § 2 of the Polish Civil Code, according to which, if a specific form is required for the validity of a legal act, the confirmation must be made in the same form. This means that if the subject of the legal act is, for example, the sale of real estate, for which a notarial deed is required, the confirmation of that act must also be made in the form of a notarial deed. Otherwise, the confirmation will be ineffective.

Setting a deadline for the confirmation of the contract

Pursuant to Article 103 § 2 of the Polish Civil Code, the other party to the contract may set a reasonable deadline for the confirmation of the contract for the person (company) on whose behalf the contract was concluded; the contract becomes void upon the ineffective expiry of the set deadline.

Against this background, an important practical question arises: how long is the other party obliged to wait for the company to take a position?

The provision does not specify any time limit; however, legal scholarship suggests that the term ‘reasonable’ refers to ‘the time within which a reasonable person might consider whether to accept the conduct of a fraudulent agent’ (W. Borysiak (ed.), Polish Civil Code. Commentary, 34th ed., 2025), i.e. to consider the situation, make an appropriate decision, express it and inform the other party of it.

Where the person on whose behalf the contract was concluded (the alleged principal) refuses to confirm it, or the deadline set by the other party for its confirmation expires, the other party to the contract is entitled to certain claims against the alleged agent:

–    reimbursement of the consideration provided in performance of the contract,

–    compensation for the loss suffered in connection with the conclusion of the contract.

In this situation, a key consideration for the person who performed the act as an alleged agent is that their liability arises regardless of their fault, and also regardless of whether they were aware that they were acting without authority or beyond the scope of their authority.

For businesses, the practical consequence of this situation is that if the other party to the contract is represented by a person claiming to be the company’s agent, a detailed verification must be carried out to ensure that this person has been duly authorised. Both the content of the power of attorney itself and an extract from the National Court Register (KRS) for the company should be analysed in order to confirm who, on the principal’s side, was authorised to grant the power of attorney.

Bearing in mind the potential liability, the attorney-in-fact should, first and foremost, analyse the scope of the power of attorney. If the power of attorney has been worded imprecisely, or if the attorney-in-fact has doubts regarding the scope of the authority, the power of attorney should be reworded or clarified. Otherwise, the attorney-in-fact may act as an ‘alleged attorney-in-fact’.

Expiry of a power of attorney in a company

Under Article 101 of the Polish Civil Code, there are three legal events that result in the expiry of a power of attorney:

• revocation of the power of attorney by the principal,
• death of the principal (where the power of attorney is granted by a natural person),
• death of the attorney.

Other circumstances may also include:

• the expiry of the term to which the power of attorney was limited,
• the loss of legal personality by the principal or the agent,
• where the power of attorney was granted for a specific act – the performance of the legal act by the agent,
• the expiry of the underlying relationship from which the power of attorney arose as a statutory consequence.

The power of attorney is revoked upon the principal’s statement of revocation reaching the agent in such a way that the agent is able to acquaint themselves with its content (Article 61 of the Polish Civil Code). The revocation of a power of attorney is a unilateral legal act of an informal nature. The principal’s statement may be made in any form, but for evidential purposes, the written form is recommended.

A registered holder of a general commercial power of attorney (pl. prokurent) and proxy – key differences

Under article 1091(1) of the Polish Civil Code, a registered holder of a general commercial power of attorney is granted by an entrepreneur subject to the obligation to be entered in the register of entrepreneurs, which includes the authority to perform judicial and extrajudicial acts relating to the running of the business. Prokurent is therefore a type of power of attorney granted exclusively by entrepreneurs – those entered either in the Central Register and Information on Economic Activity or in the register of entrepreneurs of the National Court Register.

The scope of a general commercial power of attorney derives from the Polish Civil Code itself, rather than from the will of the represented entity, as is the case with powers of attorney. Furthermore, a proxy has particularly broad powers, significantly exceeding the scope of authority provided for by the regulations in relation to an attorney-in-fact. The Act defines the scope of prokura as all judicial and extrajudicial acts related to the running of a business, and for the assessment of the scope of a procurator’s actions, it is irrelevant whether a given act constitutes an act of ordinary management or an act exceeding the scope of ordinary management (W. Borysiak (ed.), Polish Civil Code. Commentary, 34th ed., 2025).

It should be borne in mind, however, that the granting of procuration must be in writing, on pain of nullity.

General commercial power of attorney comes into effect upon its grant – that is, upon the submission of the relevant declaration of intent. Until it is registered, it is therefore referred to as ‘unregistered proxy authority’. Of course, given that a power of attorney is subject to disclosure in the register, the entrepreneur’s business partners should verify in the available companies’ systems, i.e. in particular in the Central Register and Information on Economic Activity and in the National Court Register, whether the person claiming the status of a proxy has been disclosed there as a proxy.

A practical example from Polish case law:

“It is impermissible to enter a single proxy in the register of entrepreneurs in the National Court Register with the proviso that he may act only jointly with a member of the management board” (Polish Supreme Court resolution of 30 January 2015, ref. no. III CZP 34/14).

Summary

A power of attorney within a company is a key instrument enabling the efficient functioning of the business in commercial transactions. Granting a power of attorney allows the company’s management board to delegate specific tasks to employees, whilst retaining control over the scope of the authorised persons’ activities.

It is of the utmost importance to correctly distinguish between the different types of power of attorney in Poland: general, specific and special, given that each entails a different scope of authority for the attorney-in-fact and different formal requirements. It is also essential to understand the limits of the authority granted, as exceeding these limits may result in liability on the part of the attorney-in-fact.

Particular attention should also be paid to situations where an agent acts without authority or exceeds their authority, i.e. cases of so-called apparent authority. The mechanism provided for in Article 103 of the Polish Civil Code allows for the confirmation of an act and its ‘rectification’ with ex tunc effect; however, until that time, the act remains ineffective vis-à-vis the company.