Glossary · Governance and representation

Commercial power of attorney (Handlungsvollmacht)

Also: Handlungsvollmacht, commercial authority, i. V.

In short

The commercial power of attorney authorises the transactions and legal acts that a commercial business, or certain transactions within it, usually involve. It is narrower than Prokura and is not entered in the commercial register.

Commercial power of attorney (Handlungsvollmacht) explained

The HGB recognises three levels: authority for the entire business, for a certain type of transaction, such as purchasing, and for individual transactions (Sec. 54 (1) HGB). The holder may only sell or encumber real estate, enter into bill of exchange liabilities, take out loans and conduct legal proceedings with special authority (Sec. 54 (2) HGB). They sign with an addition expressing the power of attorney, usually "i. V." (on behalf of); they may not use a Prokura suffix (Sec. 57 HGB). In a GmbH, the shareholders decide on holders of commercial power of attorney for the entire business (Sec. 46 no. 7 GmbHG).

Legal basisSec. 54, 57 HGB; Sec. 46 no. 7 GmbHG

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Related terms

ProkuraProkura is a commercial-law power of attorney for all types of transactions and legal acts that operating a commercial business involves; its holder is called a Prokurist. It is granted expressly and entered in the commercial register.GmbH (limited liability company)The GmbH is a corporation and legal entity formed by one or more persons with at least €25,000 share capital. As soon as it is entered in the commercial register, in principle only the company's assets are liable for its debts.Exemption from Sec. 181 BGBThe exemption from Sec. 181 BGB allows a managing director to conclude contracts on behalf of the company with themselves or with a third party they also represent. Without this permission, such self-dealing transactions are generally not allowed.External managing director (Fremdgeschäftsführer)An external managing director runs a GmbH or UG without holding a share in it. They are appointed by the shareholders and are subject to their instructions.General partner (Komplementär)The general partner is the partner in a KG who is personally liable without limit, and manages its business. A GmbH or UG can also be the general partner, as in the GmbH & Co. KG.Limited partner (Kommanditist)The limited partner is the partner with limited liability in a KG; they are only liable to creditors up to their liability amount entered in the commercial register. Once they have paid their contribution, their liability is excluded.

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