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The power of attorney arrangement determines who is authorized to sign what on behalf of a BV — contracts, payments, personnel decisions. There are three main forms: statutory (stipulated in the articles of association), by proxy (via a power of attorney deed), or registered with the Chamber of Commerce (visible to third parties). Well-organized power of attorney prevents disputes (“were you authorized to sign that?”) and protects the BV against unauthorized transactions. Below are the structure, Chamber of Commerce registration, and how Tessa's board handles the power of attorney for 12 employees.
The short answer
- What: Regulation regarding who is authorized to act/sign on behalf of a BV.
- Forms: statutory, power of attorney, registered with the Chamber of Commerce.
- Scope: amounts, type of decisions, joint or independent.
- External visibility: Chamber of Commerce registration protects third parties in good faith.
- Amendment: via shareholders' resolution or board resolution, plus Chamber of Commerce update.
Three main forms
1. Statutory authority of representation
It is stipulated in the articles of association who has independent or joint authority. Standard: the board (or directors) acts on behalf of the BV. In the case of multiple directors: jointly or each independently — choice in the articles of association.
2. Power of Attorney
By means of a power of attorney deed (notarial or private), non-directors are authorized to act on behalf of the BV — e.g., a director, department head, or sales manager. Specific to the type of decisions, amounts, and period.
3. Chamber of Commerce power of attorney
Registered in the Commercial Register — third parties can see who is authorized to do what. Protects third parties acting in good faith: if they have a contract with a registered proxy holder, the contract is valid even in the event of an internal conflict.
Scope
Per person: possible restrictions on:
- Amount: max €5,000, €50,000, or unlimited.
- Type of decision: contracts, payments, personnel.
- Domain: specific department, branch, or activity.
- Period: temporary or indefinite.
- Co-signature: independent or requires a second signature.
Tessa's power of attorney
Tessa structures for 12 employees:
- Tessa herself (director): unlimited, independently authorized.
- Two co-directors: independent up to €250,000, jointly with Tessa above that.
- Sales Manager: independent, up to €50,000 for client contracts.
- Purchasing Manager: independent work up to €25,000 for suppliers.
- HR employee: employment contracts self-employed up to CLA wage; above that with management.
Chamber of Commerce registration for externally visible power of attorney of directors. Internal power of attorney for sales/purchasing/HR (not registered with the Chamber of Commerce).
External visibility via Chamber of Commerce
Benefit of Chamber of Commerce registration: third parties can verify who is authorized to sign before the contract is signed. Legal protection: a contract with a registered proxy holder is valid even in the event of an internal conflict (Articles 25-26 of the Trademark Act).
Not all power of attorney needs to be registered with the Chamber of Commerce — only for external transactions where visibility is valuable. Internal arrangements via a power of attorney document.
In case of violation of power of attorney
Employee signs beyond authority:
- Internal: employment law consequences (warning, dismissal).
- External to a third party acting in good faith: often still a valid contract — Chamber of Commerce registration provides protection.
- Against a third party acting in bad faith: contract voidable.
- Damages to the BV: recoverable from the employee.
Honest recommendation
For a BV with more than 5 employees and/or multiple directors: a clear power of attorney arrangement is essential. Specify in the articles of association who exercises independent or joint management. Power of attorney document for key employees. Chamber of Commerce registration for externally visible power of attorney. Periodic review in the event of personnel changes. A notary or administrative law specialist can set up the structure (€500–€2,500).
For other topics: shareholders' resolution, minutes of the General Meeting of Shareholders , and UBO declaration.
Frequently Asked Questions
Regulation determining who is authorized to act and sign on behalf of a BV — contracts, payments, personnel decisions. Three forms: statutory (in the articles of association), via power of attorney (deed), or registered with the Chamber of Commerce (externally visible).
Power of attorney registered in the Commercial Register — third parties can see who is authorized to do what. Protects third parties acting in good faith: contract with a registered proxy holder is valid even in the event of an internal conflict.
Limitations per person can be set by amount (€5,000 - unlimited), type of decision (contracts/payments/personnel), domain (department/branch), period (temporary/indefinite), and co-signature (independent or joint).
For externally visible authorization of directors or key employees where third parties require assurance. Not all authorization needs to be registered with the Chamber of Commerce — internal arrangements via a power of attorney document without external publication.
Internal: consequences under employment law (warning, dismissal). External to a third party in good faith: contract often still valid (Chamber of Commerce protection). Against bad faith: voidable. Damages to the BV: recoverable from the employee.
Via shareholders' resolution (for statutory amendment) or board resolution (for proxy). Plus Chamber of Commerce update within 1 week. Submitting changes in a timely manner prevents legal uncertainty for third parties.
Private limited company (BV) with 5 or more employees and/or multiple directors. As SMEs grow, clear power of attorney becomes essential — preventing disputes (“were you authorized to sign that?”) and protecting the BV against unauthorized transactions.
