If a managing director and an authorised signatory (a Prokurist) each grant a power of attorney for the commercial register as 'grantor' in two separate deeds, it cannot be assumed that the power of attorney is granted on behalf of the GmbH. If the applicant refuses to submit the additional documents requested by the registration court, the application for registration must be rejected.
In German limited liability companies, GmbHs, powers of attorney for commercial register matters are granted by as many members of the managing board as are needed to represent the company. These powers of attorney must be notarised. In a GmbH with joint representation, usually two managing directors, or one managing director together with one authorised signatory (Prokurist), are authorised to represent the company. In a recent decision, the Dusseldorf Higher Regional Court made it clear that two separate powers of attorney for commercial register matters, one signed by a managing director and one signed by a Prokurist, are not sufficient for a valid power of attorney. Because in a company with joint representation, two separate powers of attorney do not clearly establish that the undersigned intend to act on behalf of the represented GmbH.
The applicant is a notary authorised to act on behalf of the GmbH and filed for registration in the commercial register of a joint authorisation to represent the company in legal transactions (Gesamtprokura) for four individuals. The shareholders' agreement of the GmbH provided for joint representation. Two managing directors, or one managing director together with one Prokurist, were entitled to represent the company. B, in the role as an authorised representative of C (one of the managing directors of the GmbH) and D (Prokurist of the GmbH), signed the application for an entry in the commercial register. The request was accompanied by copies of two authorisations, in which C and D as 'grantors' each separately granted B power of attorney. The registration court initially dismissed the application with an informal interim order on the basis that B's power of attorney had not been proved to the registration court in due form. The applicant refused to submit further documents, whereupon the registration court issued the interim order against which an appeal was brought.
The appeal was successful, but only temporarily. The Dusseldorf Higher Regional Court decided, among other things, that B had not been validly authorised. Moreover, the registration court should not have decided by way of an interim order but should have dismissed the application for registration after the applicant's refusal to submit the requested documents.
The Higher Regional Court first clarified that the GmbH may in fact be represented by an authorised person for its registration request. Requesting the registration of a joint authorisation to represent the company in commercial matters (Prokura) in the commercial register is not a strictly personal obligation of a managing director. The senate points out that a registration requires a power of attorney certified by a notary (section 12 (1) sentence 3 of the German Commercial Code (Handelsgesetzbuch,HGB)). In a GmbH, such power of attorney is granted by as many members of the management board as are needed to represent the company.
In this respect, the Dusseldorf Higher Regional Court concludes that the powers of attorney granted by C and D are invalid, as they conflict with the stipulation on the joint representation of the GmbH. One managing director (here C) and one authorised signatory (Prokurist, here D) who each appear as 'grantors' in separate powers of attorney cannot validly grant power of attorney to a third party (here B) for commercial register applications on behalf of the GmbH. As (i) the power of attorney was not signed jointly by C and D, and (ii) the term 'grantor' used in both powers of attorney was not explicit, it cannot be assumed to imply that the power of attorney was supposed to be granted on behalf of the GmbH.
Furthermore, the registration court should have declined the request earlier, i.e. once the unsuccessful informal interim order had been issued. The interim order is an instrument for the registration court to demand the removal of obstacles to registration such as an incomplete filing. The applicant, however, refused to remove the obstacle after an (informal) interim order, insisting on the applicant's original request instead, which the Higher Regional Court finds must be considered a final refusal. This constituted a final obstacle which in turn had to result in a decline of the request for registration.
In principle, powers of attorney do not have to be in the same form as the legal transaction to which the power of attorney relates (section 167 (2) of the German Civil Code (Bürgerliches Gesetzbuch, BGB)). In derogation from this principle, powers of attorney for commercial register applications must be certified by a notary (section 12 (1) sentence 3 HGB). A representation by power of attorney for commercial register matters is, however, inadmissible, if the applicant has to make strictly personal affirmations - for example as a newly appointed managing director of a GmbH (section 39 (3) of the German Limited Liability Companies Act (GmbH-Gesetz,GmbHG)
In order for a power of attorney to be valid for the entry of the joint authorisation in the commercial register, the power of attorney must be signed by as many members of the company's management board as are required for the company's representation (i.e., if necessary, together with an authorised signatory (Prokurist). The applicant submits the original copy of the power of attorney to a notary who will submit it as an electronically certified copy, together with the actual application, to the registation court.
Two separate powers of attorney, each signed individually by the managing director and an authorised signatory as 'grantors', do not suffice in the case of a joint representation scenario. It is therefore necessary to explicitly clarify in the power of attorney that the authorised persons act on behalf of the GmbH (rather than acting as 'grantors' themselves). We further recommend that the authorised persons sign one and the same power of attorney.
Should the registration court issue an interim order (even an informal one), demanding that the applicant complete the registration filing, the applicant should think twice about refusing to give the requested information and insisting on the original filing. A refusal leads to a rejection of the registration request, with fees still being charged. Until an entry has been made, the applicant can still informally withdraw (revoke) the registration request at any time, which comes at a lower cost than a rejection.
Dusseldorf Higher Regional Court, decision of 29 August 2024 - 3 Wx 115/24
Christian Burmeister
Damien Heinrich
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