Prokura (commercial Proxy) – what is it ? Whether it is “simply” a power of attorney?
From our perspective, it is worth drawing a clear distinction right away: prokura is a power of attorney, but it is not the ordinary power of attorney we are familiar with in everyday life. It is an institution of commercial law, regulated in the Civil Code (Art. 109¹–109⁹), created specifically so that a business can operate efficiently and predictably, even when the owner or management is unable to sign everything personally.
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In the simplest terms, a power of attorney is a special type of authorization granted by an entrepreneur subject to the obligation to register with the CEIDG or the KRS business register. Its essence lies in a broad scope of authority: the power of attorney includes authorization for judicial and extrajudicial acts related to the operation of the business. This statement has significant practical importance, as it tells us that a proxy is not a “one-issue representative,” but rather a person who can act in many areas of the company’s day-to-day operations.
At the same time, the power of attorney has statutory “safeguards.” The law explicitly specifies actions that a proxy cannot perform without additional, specific authorization. As a result, a power of attorney is, on the one hand, a flexible tool, and on the other, it does not automatically grant the authority to make the most “strategic” decisions regarding the company, such as managing the company as a whole or carrying out key real estate transactions. Consequently, a power of attorney is a solution that strikes a balance
Proxy vs. “ordinary” power of attorney: what’s the difference that affects our daily lives?
In everyday language, we often say, “We’ll give someone power of attorney to sign contracts.” And that is sometimes sufficient, but only in certain situations. A standard power of attorney can be drafted almost any way we like: it may cover a single act, a specific group of acts, or a broad scope, but its “weight” in dealings with counterparties depends on the document’s content, interpretation, and whether the other party considers the authorization sufficient.
Prokura works differently. First, its scope is largely defined by law—the proxy is authorized to perform judicial and extrajudicial acts related to the operation of the business, so the counterparty does not have to “parse” every clause of the power of attorney to assess whether the proxy can sign a contract. Second, the power of procuration is disclosed in the registry (KRS), which provides additional transparency in business transactions. In practice, it is precisely this transparency and predictability that make the power of procuration a popular choice in companies and firms operating on a larger scale.
There is also an organisational difference. A standard power of attorney is often drafted for a “single purpose,” such as signing a lease agreement. Procuration is designed as a permanent tool: it is intended to function in the course of day-to-day operations and “maintain” the company’s operational capacity when the management or owner cannot be everywhere at once.
Read also: Rights and obligations under personal data protection regulations for companies.
See also: Rights and obligations under data protection regulations for businesses
Why the law treats power of attorney as an exception: ensuring the security of transactions and protecting business partners
In practice, a business does not operate in a vacuum. We sign contracts; we have customers, suppliers, banks, lessors, and government agencies. Each of these entities expects that the person representing the company has actual authority. Procuration addresses this need: it organizes representation in a way that is understandable to the market.
This is precisely why a power of attorney is subject to mandatory registration. If a business owner is required to be registered in the CEIDG or the KRS, we can easily verify basic information about them and their representation. Disclosing power of attorney in the KRS serves as “clear information for the world”: the attorney-in-fact is authorized within the statutory scope, and business partners do not have to rely solely on the company’s internal documents.
Proxy in a company as an organisational tool, not a “formality for the KRS”
In practice, a power of attorney is chosen when we want to delegate matters in a formal, secure, and transparent manner. If the company is growing and the management board does not want (or cannot) sign everything, a power of attorney allows for transferring some authority to a trusted individual, such as the CFO, COO, or a member of the management team.
It is worth remembering one rule: a power of attorney works best when it is part of a broader organisational structure within the company. On its own, it cannot replace internal procedures, document workflows, or approval rules.
However, it can serve as the foundation upon which we build this organization, as it clearly defines who and to what extent may act on behalf of the entrepreneur.
Who is a proxy? What is a commercial proxy, and what role do they play in a company?
Now that we know what a power of attorney is, we naturally move on to the second most frequently asked question: who is a proxy and what is their role in a company? A proxy is a natural person with full legal capacity to whom an entrepreneur grants a power of attorney, i.e., broad authority to act in matters related to running the business. In practice, a proxy is “the person who can sign,” but it’s worth clarifying this: a proxy signs not in their own name, but on behalf of the business owner or the company. Their statements—if they fall within the scope of the power of attorney—have direct legal consequences for the company.
This is an important distinction, as it allows one to understand the role of the proxy without unnecessary oversimplification. A proxy is not a corporate body and does not “replace” the board of directors. He is a proxy with a special status, whose authority derives from the law and is recorded in the registry. Thanks to this, a proxy can effectively streamline the company’s operations, but does not assume managerial responsibility in the same way that the board of directors does.
Company proxy: an agent for day-to-day operations, but not a member of a governing body
In capital companies (e.g., a limited liability company), external representation is, as a rule, the responsibility of the management board. It is the management board that makes decisions regarding the company and signs contracts in accordance with the rules of representation disclosed in the National Court Register (KRS). The proxy enters this picture as a tool: the company may delegate a specific area of responsibility to them to streamline processes and relieve the management board of some of its operational burden.
It is worth stating this clearly here, as it is a frequent source of misunderstanding: a proxy is not a “second management board” and is not a “board member without registration.” A proxy acts on the basis of a power of attorney. The management board acts on the basis of its appointment to the body. These are two different sources of authority and two different liability regimes.
Read also: Partnerships and Corporations – Characteristics and Differences
How a commercial proxy operates in practice: contracts, government agencies, correspondence, and court cases
On a practical level, a proxy is usually appointed so that the company does not lose momentum. If we are waiting for the management board’s signature and deadlines are looming, downtime is easy to come by. A proxy allows us to avoid this, as they can sign documents within the statutory scope related to running the business.
As a result, a proxy often handles routine business operations: contracts with vendors, orders, addenda, statements, and administrative matters. They may also take action in court cases related to the company’s operations, which is particularly important in practice when the company is involved in commercial disputes or must respond to court filings. We note, however, that a proxy—despite broad authority—still operates within the limits of the power of attorney. Where the law requires a special power of attorney, the power of attorney alone is not sufficient.
Independent power of attorney and independent attorney-in-fact: why are these concepts so important in day-to-day business operations?
In practice, most questions revolve around whether an attorney-in-fact can act alone or must act jointly with another person. This is where the terms “independent power of attorney” and “independent attorney-in-fact” naturally come into play.
If we grant independent power of attorney, the attorney-in-fact acts independently. This means that they can make declarations of intent and sign documents within the scope of the power of attorney on their own, without needing the signature of another attorney-in-fact or a member of the management board. In fast-paced companies, this model is often chosen for purely organizational reasons: it facilitates day-to-day operations and shortens the decision-making process.
At the same time, independent power of attorney does not mean “complete freedom.” An independent proxy still operates within the scope of the authority granted by the power of attorney and the company’s internal rules. This is precisely why, in well-managed companies, the power of attorney is combined with internal procedures: who approves contracts above a certain amount, who assesses risk, and which documents require approval by the management board. The power of attorney provides the ability to act, but does not exempt one from responsible management.
The commercial proxy and business partners: why is an entry in the National Court Register (KRS) and a clear proxy model important?
From the perspective of business partners, certainty is paramount: whether the person signing the contract is actually authorized to do so. In this sense, the company’s proxy is a very “transparent” figure, as their authority is disclosed in the register. If a business partner sees independent power of attorney listed in the National Court Register (KRS), they know that the signature of a single person acting as a proxy may be sufficient. If they see joint power of attorney, they understand that joint action is required.
In practice, it is precisely the specificity of the type of power of attorney that protects both parties to the transaction. From the company’s perspective, we reduce the risk of disputes over the validity of actions. From the counterparty’s perspective, we increase predictability and alleviate the fear that the contract will be challenged later.
Commercial Proxy as a tool that works well when set up correctly
Finally, it is worth summarizing everything into a coherent thought, because the topic of proxy—though at first glance it looks like “just another formality for the National Court Register”—is, in practice, one of those solutions that can genuinely improve a company’s operations. As the number of contracts in a company grows, more operational decisions arise, and the management or owner is unable to sign documents personally, power of attorney becomes an organizational tool: it allows for the delegation of certain activities without chaos and without improvising with each new power of attorney.
At the same time, it is not an instrument that works “on its own.” Procuration has significant power because its scope is derived from the law and is broad, but this power requires precision. Incorrectly setting up a power of attorney or an ill-considered choice of its type can have the opposite effect: instead of speeding up document circulation, we will begin to block processes, multiply signatures, or—worse—expose the company to risks associated with improper representation. Therefore, it is worth treating the power of attorney not as an afterthought, but as an integral part of the company’s management system.
When should you consult a lawyer about choosing the type of power of attorney?
A power of attorney is a solution that can be very beneficial, provided it is tailored to the company’s actual needs. If you have doubts about whether independent power of attorney or joint power of attorney is better, if you are unsure how to interpret the term “separate power of attorney” in practice, or if you want to ensure that the rules of representation are consistent with the entry in the National Court Register (KRS), it is worth discussing the matter in a structured manner.
If you wish to analyze the power of attorney in relation to your own company and minimize the risk of formal errors, simply contact us to receive legal advice tailored to your company’s specific situation.
