A limited company (s.r.o.) acts externally through its statutory body – the managing director. Alongside the director, a company can authorise others to represent it: a prokurista with a broad power registered in the commercial register, or an agent with an ordinary power of attorney for specific acts. The difference is not a formality – it decides who can bind the company and how far. Slovakia and the Czech Republic regulate this similarly, but one key detail differs.
What is prokura and how does it differ from a power of attorney?
Prokura is a special type of authorisation granted by a business registered in the commercial register. It empowers the holder (the prokurista) to carry out all legal acts that occur in the operation of the business – including those that would otherwise require a special power of attorney. It is therefore an unusually broad, pre-defined authority that third parties can easily verify in the register. In Slovakia it is governed by §14 of the Commercial Code, in the Czech Republic by §450 et seq. of the Civil Code.
An ordinary power of attorney works differently. It can be granted to anyone, for anything, but only to the extent you precisely define in it. It is not entered in the register, and the other side must check its scope from the wording of the authorisation itself. For context on how a company is set up and governed, see our overview of a single-member s.r.o. in Slovakia and Czechia.
Who acts for the company: director, prokurista or agent?
The managing director is the company’s statutory body. They are not a representative – they are the person who expresses the company’s will directly. They are appointed by the general meeting, registered in the commercial register, and their authority flows from the law, not from a power of attorney. This also carries personal exposure, which we cover in our article on the director’s liability for company debts and taxes.
A prokurista and an ordinary agent, by contrast, are representatives – they act in the company’s name based on granted authority. The prokurista’s authority is very broad by law and visible in the register; the agent’s is limited to a specific power of attorney. A company can thus have a director who runs it, a prokurista for day-to-day operations, and separately authorise an employee for a single act.
How wide is the prokurista’s authority?
A prokurista can do virtually anything connected with running the business – sign commercial contracts, hire and dismiss staff, represent the company in routine matters. The law sets one important limit: a prokura does not include the power to transfer or encumber real estate. That power must be expressly stated when the prokura is granted.
A prokura can be granted on a sole basis (the prokurista acts alone) or jointly, requiring several holders to act together – a popular safeguard against misuse. The prokurista signs by adding a designation of the prokura (such as “per procuram” or “p.p.”) to the company name, followed by their signature, and the grant must expressly state that it is a prokura.
When does a prokura take effect – the key SK vs CZ difference?
This is where the two countries part ways. In Slovakia, registration in the commercial register has a constitutive effect – the prokura arises only upon registration, so until the filing is made the prokurista cannot validly act. In the Czech Republic, the prokura is effective upon being granted, and registration is merely declaratory, confirming and publishing the authority to the outside world.
In both countries the prokura ends mainly by revocation, the holder’s death or the company’s dissolution. The death of an individual entrepreneur does not automatically end it, which gives it particular value in family businesses. Either way, keeping documents and deadlines in order when granting or revoking a prokura is essential.
When is a prokura worth it and when is a power of attorney enough?
A prokura makes sense when you want to entrust someone with lasting, broad representation – an operations director, a shareholder who is not a director, or a trusted person who should represent the company in the director’s absence. Its advantage is that the counterparty need not examine the scope; they see it in the register. For one-off or narrowly defined acts, an ordinary power of attorney is enough and need not be registered anywhere.
STEINIGER | law firm – when setting up a prokura, deciding its scope (sole or joint, with or without real estate) and wording the registration filing, it is worth having the text reviewed by a lawyer so the authority matches what the company actually wants and the registry court does not reject the filing.
Which mistakes should you avoid?
The most common error is assuming a prokurista can do absolutely everything – including selling company real estate without special authority. The second is confusing roles: assigning a prokurista tasks reserved for the director as a body, or leaving signing rights unclear. The third, in Slovakia especially, is underestimating the constitutive registration – relying on a prokurista who is not yet registered, which can make their acts challengeable.
We therefore recommend recording clearly in writing who may act for the company, in what scope and in what manner, and reflecting every change in the register in good time – for instance together with the general meeting of the s.r.o. that decides on such changes.
Considering whom to grant a prokura to and in what scope, and want signing rights in your company set up safely?
FAQ
Can a prokurista sell the company’s real estate?
Not automatically. By law a prokura does not include the power to transfer or encumber real estate. That power must be expressly stated when the prokura is granted. If the prokura contains no such clause, the prokurista cannot validly sell or pledge the property, and the act requires the director or a special power of attorney.
When does a prokura take effect in Slovakia and Czechia?
The timing differs. In Slovakia the prokura arises only on registration in the commercial register – the entry is constitutive, so the holder cannot act beforehand. In the Czech Republic the prokura is effective as soon as it is granted and registration is merely declaratory. In both cases, however, the register entry is needed so that third parties take the authority into account.
What is the difference between a director and a prokurista?
The director is the statutory body – they express the company’s will directly and their authority comes from the law. The prokurista is a representative acting in the company’s name under a granted prokura, albeit a very broad one. A company can have both at once: the director leads it as a body, while the prokurista handles day-to-day operations within clearly defined limits.