Glossary · Governance and representation

Prokura

Also: Prokurist, Einzelprokura, Gesamtprokura, Filialprokura, general commercial power of attorney, authorised signatory

Dr. Georg Schröder, LL.M.Lawyer

In short

Prokura 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.

Prokura explained

It can only be granted by the owner of the commercial business or their legal representative, and only expressly (Sec. 48 (1) HGB); in a GmbH, the shareholders decide on the appointment of Prokuristen (Sec. 46 no. 7 GmbHG). There are three types: sole Prokura, joint Prokura for several persons together (Sec. 48 (2) HGB) and branch Prokura for a branch with its own company name (Sec. 50 (3) HGB). Other restrictions have no effect on third parties (Sec. 50 (1) HGB). The Prokurist may only sell or encumber real estate with special authority (Sec. 49 (2) HGB). Granting and expiry must be registered in the commercial register (Sec. 53 HGB). The commercial power of attorney (Handlungsvollmacht) is narrower.

Legal basisSec. 48 to 53 HGB; Sec. 46 no. 7 GmbHG

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Related terms

Commercial power of attorney (Handlungsvollmacht)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 register (Handelsregister)The commercial register is a public, electronically kept register of merchants and commercial companies, maintained by the register courts. Division A (HRA) lists, for example, sole traders, OHGs and KGs; division B (HRB) lists, for example, GmbHs, UGs and AGs.Company name (Firma)In the legal sense, the "Firma" is the name under which a merchant conducts business and signs. It must be distinctive, must not be misleading and must contain the legal form suffix.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.

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