In business practice, one important question frequently arises: when is it more appropriate for a company to have a manager, and when does it make sense to appoint a procurator? This issue is particularly important for company owners who are expanding their operations, growing their teams, or seeking a better structure for corporate representation. It is precisely here that sound preliminary assessment in the field of commercial and corporate law can prevent future difficulties.
First and foremost, it must be clarified that the procurator and the manager are not the same, even though both may represent the company. The difference between them lies not only in their designation, but also in the very legal nature of their functions.
The manager is a corporate body of the company. The manager forms part of the company’s internal structure and participates in its management as a legally recognised corporate body. The procurator, on the other hand, is a special commercial attorney-in-fact to whom the trader grants broad powers of representation in relation to the enterprise.
This is the first major distinction. The manager acts as part of the company itself. The procurator acts on the basis of a procuration – a special authorisation granted in the form prescribed by law and registered with the Commercial Register. In other words, the manager “manages from within,” whereas the procurator represents the company with a very broad scope of authority without being a corporate body of the company.
As a rule, this is done when the owner or the manager wishes to confer broad operational powers of representation on a trusted person without altering the corporate structure of the company.
This is commonly encountered in cases of:
In such situations, the procurator may be an extremely useful instrument, because it provides stable and publicly registered powers of representation.
It is important to understand that the appointment of a procurator does not replace the manager. If the company is legally required to have a manager, the existence of a procurator does not remove that requirement. The manager remains the person vested with the corporate function within the company. The procurator may operate alongside the manager, but does not take the manager’s place in the corporate sense. For precisely that reason, when making such a decision it is often advisable to seek a consultation with a corporate lawyer in order to determine which model is more suitable for the specific business.
There is also another important practical distinction. By law, the procurator may perform all acts and transactions connected with the conduct of the trader’s business. This is a very broad power of representation. It does, however, have a limit: without express authorisation, the procurator may not dispose of or encumber the trader’s real estate. In the case of the manager, the position is different, because the manager’s powers derive from the law, the articles of association, and the resolutions of the competent corporate bodies of the company.
In practice, the choice between a manager and a procurator is a matter of which is more appropriate. If the objective is to organise the company’s internal management, the proper instrument is the manager. If the objective is broad commercial representation and operational flexibility, without changing the corporate bodies of the company, then the procurator is often a suitable solution. In the case of internal disputes, negotiations, or the need for a more balanced approach in relations between shareholders and management, a mediator may also sometimes play a useful role, especially where the business is seeking a solution without unnecessary escalation of conflict.
The most common mistake is to confuse these two legal figures. Once their legal roles are conflated, practical problems arise very quickly – unclear representation, improperly documented resolutions, difficulties with registration, and unnecessary risk for the company. That is why the correct legal structure should be chosen in good time, before a dispute or refusal arises.
If you are considering the appointment of a procurator, the choice of a manager, or a restructuring of representation within the company, please contact Anelia Ivanova Law Firm for professional legal advice and a practical solution tailored to your business.
First and foremost, it must be clarified that the procurator and the manager are not the same, even though both may represent the company. The difference between them lies not only in their designation, but also in the very legal nature of their functions.
The manager is a corporate body of the company. The manager forms part of the company’s internal structure and participates in its management as a legally recognised corporate body. The procurator, on the other hand, is a special commercial attorney-in-fact to whom the trader grants broad powers of representation in relation to the enterprise.
This is the first major distinction. The manager acts as part of the company itself. The procurator acts on the basis of a procuration – a special authorisation granted in the form prescribed by law and registered with the Commercial Register. In other words, the manager “manages from within,” whereas the procurator represents the company with a very broad scope of authority without being a corporate body of the company.
When, then, is a procurator appointed?
As a rule, this is done when the owner or the manager wishes to confer broad operational powers of representation on a trusted person without altering the corporate structure of the company.
This is commonly encountered in cases of:
- a growing business,
- multiple business locations,
- active negotiations with clients and suppliers,
- the need for day-to-day decision-making of a commercial nature.
In such situations, the procurator may be an extremely useful instrument, because it provides stable and publicly registered powers of representation.
It is important to understand that the appointment of a procurator does not replace the manager. If the company is legally required to have a manager, the existence of a procurator does not remove that requirement. The manager remains the person vested with the corporate function within the company. The procurator may operate alongside the manager, but does not take the manager’s place in the corporate sense. For precisely that reason, when making such a decision it is often advisable to seek a consultation with a corporate lawyer in order to determine which model is more suitable for the specific business.
There is also another important practical distinction. By law, the procurator may perform all acts and transactions connected with the conduct of the trader’s business. This is a very broad power of representation. It does, however, have a limit: without express authorisation, the procurator may not dispose of or encumber the trader’s real estate. In the case of the manager, the position is different, because the manager’s powers derive from the law, the articles of association, and the resolutions of the competent corporate bodies of the company.
In practice, the choice between a manager and a procurator is a matter of which is more appropriate. If the objective is to organise the company’s internal management, the proper instrument is the manager. If the objective is broad commercial representation and operational flexibility, without changing the corporate bodies of the company, then the procurator is often a suitable solution. In the case of internal disputes, negotiations, or the need for a more balanced approach in relations between shareholders and management, a mediator may also sometimes play a useful role, especially where the business is seeking a solution without unnecessary escalation of conflict.
The most common mistake is to confuse these two legal figures. Once their legal roles are conflated, practical problems arise very quickly – unclear representation, improperly documented resolutions, difficulties with registration, and unnecessary risk for the company. That is why the correct legal structure should be chosen in good time, before a dispute or refusal arises.
If you are considering the appointment of a procurator, the choice of a manager, or a restructuring of representation within the company, please contact Anelia Ivanova Law Firm for professional legal advice and a practical solution tailored to your business.
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