The company is growing and the managing director has become the bottleneck. Every purchase order, supplier contract and complaint is signed by the director alone and everyone else waits. There is more than one solution, and they differ in three respects: how broadly the authorised person may act, whether their authority can genuinely be limited towards business partners, and whether it is entered in the Commercial Register. In choosing, it helps to start with the question of what that person actually has to sign.
Authorisation by activity: an employee within their own remit
The least formal tool is authorisation to carry out a particular activity in the operation of the business. A buyer, a shop manager or a warehouse worker needs no separate document for each act, because the law derives their authority from what they ordinarily do in their work:
A person authorised to carry out a particular activity in the operation of a business is empowered to perform all acts that ordinarily occur in that activity.
— Section 15(1) of the Commercial Code (unofficial English translation)
Where the authorised person exceeds the scope of the authorisation, the entrepreneur is bound only where the third party neither knew nor could have known of the excess (Section 15(2)). An entrepreneur may also be bound by the conduct of another person at its business premises where the third party could not have known that the person acting was not authorised to do so (Section 16). Authorisation by activity suits recurring business within a single unit, not major contracts outside ordinary operations.
Power of attorney: a scope you define yourself
An ordinary power of attorney is the most precise tool. A power of attorney must state the scope of the attorney’s authority (Section 31(1) of the Civil Code) and the company may narrow it to a particular type of contract, an amount or a counterparty. Where a power of attorney does not relate to a single act only, it must be in writing (Section 31(4)). Several attorneys act jointly unless the power of attorney provides otherwise (Section 31(3)), and an individual may appoint a further attorney only where the power of attorney expressly authorises them to do so (Section 33a(1)). A power of attorney is not entered in the Commercial Register, and the principal may not waive the right to revoke it at any time (Section 33b(3)).
Care is needed over the difference between the content of the power of attorney and instructions given outside it. Instructions that do not follow from the power of attorney do not affect the consequences of the conduct unless the counterparty knew of them (Section 32(2)). A limit that is to operate towards third parties as well must therefore appear in the text of the power of attorney itself.
Procuration: broad, registered and not limitable towards third parties
Procuration authorises its holder to perform all acts in the operation of the business, including those that otherwise require a special power of attorney, and it may be granted only to an individual (Section 14(1)). Disposing of and encumbering real estate is included only where expressly stated (Section 14(2)). The main difference from a power of attorney lies in limitation:
A limitation of procuration by internal instructions has no legal consequences towards third parties.
— Section 14(3) of the Commercial Code (unofficial English translation)
The brake that does operate towards third parties is joint procuration, under which two or all holders of procuration must act together (Section 14(4)). A holder of procuration is entered in the Commercial Register together with the manner of acting (Section 11(k) of Act No. 29/2026 Coll.) and, in Slovakia, the grant takes effect only on the entry (Section 14(6)). In Czechia, where there are several holders of procuration, separate acting is presumed unless otherwise specified on the grant (Section 452 of Act No. 89/2012 Coll.). Procuration is suitable where a person is to sign almost everything and partners, banks and public authorities are to see them in the register. Exactly what it covers is examined in the question on what a holder of procuration may sign, and the internal relationship with the holder in the question on a procuration holder’s contract, remuneration and liability.
Another managing director: a statutory officer with everything the office entails
Another managing director receives the most. Where there is more than one managing director, each acts separately unless the memorandum of association provides otherwise (Section 133(1)), and a limitation of a managing director’s authority is ineffective towards third parties (Section 133(3)). A managing director also bears the duties and liability of a statutory officer and is appointed by the general meeting (Section 133(4)), whose proceedings must, from 17 August 2026, be certified by a notarial deed where a managing director is appointed (Section 127a(4)(c)). A service agreement may also be concluded with a managing director, and it must be approved by the general meeting (Section 66(6)); we prepare it as part of our director’s service agreement service. What to do where a managing director exceeds an internal limit is examined in the question on a managing director who signed a contract above the limit.
How to choose
| Tool | Scope | Limitation towards third parties | Commercial Register |
|---|---|---|---|
| Authorisation by activity | acts usual in the given activity | excess binds only towards a person acting in good faith | not registered |
| Power of attorney | as set out in the power of attorney | yes, through the scope in the power of attorney | not registered |
| Procuration | all acts in the operation of the business | no, only joint procuration | registered; in Slovakia effective on entry |
| Another managing director | everything falling to a statutory officer | no | registered |
Where a person is to sign a narrowly defined set of contracts, a power of attorney is sufficient and usually better. Where they are to take over day-to-day running of the business without changing the structure of the company’s bodies, procuration is appropriate, possibly joint procuration. Another managing director makes sense where responsibility for running the company is also to be shared. We select the right tool with you at the initial consultation and handle both the grant and the registration as part of our grant of procuration service, for Slovak and Czech companies alike.
How this will work under the new Civil Code
On 1 October 2026, the National Council of the Slovak Republic approved the new Slovak Civil Code, which will take effect on 1 July 2027. It will regulate procuration, authorisation by activity and power of attorney in a common part on representation. The Commercial Code, including its rules on procuration and authorisation, is not being repealed, however, and the overlap between them will be settled definitively only by the implementing amendment. Procuration will be one of the types of power of attorney, one that may be granted by an entrepreneur registered in the Commercial Register. For procuration, the following changes:
- procuration will authorise the transfer or encumbrance of real estate only if this is entered in the Commercial Register; it is not enough to state it in the grant,
- a member of the company’s statutory or supervisory body will not be able to be a holder of procuration,
- it will also be possible to set up joint procuration so that the holder of procuration acts together with a managing director.
For powers of attorney, the rule for several attorneys is reversed. If a single written power of attorney authorises several persons and does not provide otherwise, each of them may act separately. A power of attorney for a certain type of acts will have to be in writing only if the act itself is to be in writing. A person who creates or reinforces in a business partner a reasonable belief that they have authorised someone will not be able to rely on the contrary. An entrepreneur will also be bound by conduct through electronic means that it has designated for contact with customers. For a managing director, the substance does not change.
Procurations and powers of attorney granted by 30 June 2027 should be assessed under the existing legislation. The Commercial Register Act does not yet provide for entry of a holder of procuration’s authority in relation to real estate. For transfers of real estate from 1 July 2027, therefore, use a special power of attorney with an officially certified signature. Further changes in company representation are described in our article company representation and the performance of a director’s office under the new Civil Code.
Status as of 22 October 2026: the act has been approved and was signed by the President on 20 October 2026, but has not yet been promulgated in the Collection of Laws. Until 30 June 2027, the rules described above in this article apply.
This article provides general legal information as at 22 October 2026. It does not constitute legal services or advice on your specific matter. Laws change and the details of your situation may differ. Check the appropriate course of action or contact us before making a decision.
