Understanding the Role of a Procurator
A procurator (prokurist) in an Estonian private limited company (OÜ) is a person granted a specific type of commercial representation authority known as prokura. According to § 292 of the Commercial Code (Äriseadustik), a procurator is authorized to represent the company in all legal acts related to its economic activities. This authority is broader than a standard power of attorney and is registered in the Commercial Register.
Scope of Authority and Legal Limitations
The powers of a procurator are extensive but defined by law. They include:
- Operational Management: The right to enter into contracts and perform transactions necessary for the company's daily business operations.
- Legal Representation: The authority to represent the company in court and before public authorities.
However, § 293 of the Commercial Code imposes specific restrictions. A procurator cannot sell or encumber the company's immovable property unless they have been granted specific written authorization to do so. Furthermore, the right of prokura cannot be transferred to another person. It is crucial to distinguish that a procurator is not a member of the Management Board, although they operate under the board's supervision.
Appointment and Registration
A procurator is appointed by a resolution of the Management Board. Pursuant to § 292 (2) of the Commercial Code, the granting and termination of prokura must be entered into the Commercial Register. This ensures transparency for third parties regarding the scope of the procurator's authority. The company may also stipulate that the procurator acts jointly with another procurator or a member of the Management Board.
Appointing a procurator is a significant corporate governance step that requires precise legal documentation to ensure compliance and protect the company's interests. If you require a detailed analysis of your company's governance structure or need assistance in drafting the necessary resolutions, our experts are here to help. Consult the Õigusabi 24 advanced legal AI assistant for a personalized analysis of your unique situation and take control of your corporate governance today!