Commercial Proxy (Prokura) in Czech Republic: Rules and Business Use

Prokura is one of the most powerful institutions in Czech commercial law. It allows a company to authorize another person to act on its behalf in all business matters. But with this power comes significant responsibility – both for the company granting it and for the person receiving it. Learn everything about commercial representation in Czech Republic.

What Is Prokura?

Prokura is a special type of commercial power of attorney granted by an entrepreneur (or company) to another person. According to the Czech Commercial Code (§ 435), prokura authorizes the holder to perform all legal acts connected with the company's business, including signing contracts, negotiating with partners, and representing the company in disputes.

Types of Prokura

There are several types of prokura in Czech law:

• General Prokura (generální) – covers all business activities
• Limited Prokura (omezená) – limited to specific activities or sectors
• Branch Prokura (pobočková) – limited to specific branch or location

Who Can Hold Prokura?

Only a natural person can hold prokura. A company cannot be granted prokura – only an individual can become a prokurista. The prokurista must be:

• At least 18 years old
• Capacitated (having legal capacity)
• Not banned from holding such position

How to Grant Prokura

Prokura must be granted in writing and registered in the Commercial Register (Obchodní rejstřík). The grant must include:

• Identification of the company
• Identification of the prokurista
• Scope of proxy (general or limited)
• Date of effect

Rights and Obligations of Prokura Holder

A prokurista has the right to:

• Sign contracts on behalf of the company
• Represent the company in business negotiations
• Perform all legal acts within the granted scope

But also has obligations:

• Act within the scope of prokura
• Notify third parties of any limitations
• Maintain confidentiality about company affairs

Ending Prokura

Prokura can be terminated in several ways:

• Revocation – company cancels the prokura
• Resignation – prokurista resigns the position
• Death – prokura ends with death of prokurista
• Liquidation – when company ceases operations

Liability Issues

Prokura creates significant liability for both parties:

• Prokurista – can be personally liable for acts outside scope
• Company – bound by all acts within scope of prokura
• Third parties – can rely on prokura in good faith

Prokura vs. Power of Attorney

Prokura is different from regular power of attorney:

• Prokura is only for merchants (podnikatelé)
• Prokura must be registered in Commercial Register
• Prokurista can perform almost any business act
• Regular power of attorney is more limited

Conclusion

Prokura is a powerful tool for business authorization in Czech Republic. It allows broad representation but comes with significant responsibility. Both companies and individuals need to understand the implications before granting or accepting prokura. Don't make the mistake of granting prokura without proper legal advice.

Všechny tyto služby a produkty vám pomohou snadno zvládnout. Neváhejte nás kontaktovat a objednejte si naše služby, smlouvy či produkty přímo na webu.

Všechny tyto služby a produkty vám pomohou snadno zvládnout. Neváhejte nás kontaktovat a objednejte si naše služby, smlouvy či produkty přímo na webu.