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Avoid combined “actions” of director and proxy

Are contracts in your company signed by the director and the proxy together?

German entrepreneurs who are active in Slovakia through their daughter companies often wish this combined “representation” of the company by a director together with the proxy. Both legal systems differentiate between acting on behalf of the company and representation of the company, but have different views on their combinability.  

Are contracts in your company signed by the director and the proxy together? German entrepreneurs who are active in Slovakia through their daughter companies often wish this combined “representation” of the company by a director together with the proxy. Both legal systems differentiate between acting on behalf of the company and representation of the company, but have different views on their combinability. 

Only a director can act on behalf of the company. A director is considered to be the company itself or a natural representative of the company’s will. The proxy is a special type of power of attorney. In legal theory, a proxy is a representative of the company, a sort of middleman between the company and its contractual partners.

Due to the different position of the director and the proxy we cannot recommend a combined “representation”. This legal view was recently adopted also by Slovak courts. 

However, many companies have the combined way of representation validly registered in the Commercial register. If your company is one of them, we recommend separating acting on behalf of the company by a director and representation of the company by a proxy as soon as possible to avoid a possible ineffectiveness of contracts signed in this way.