Representation of a Company in General

A limited liability company is an independent legal person which needs a natural person to act on its behalf. The company’s representative is a company’s organ or a person, who is able in the company’s name to acquire rights and make commitments that are binding on the company as well as to act before courts and other authorities on behalf of the company.

Previously the Companies Act representation was commonly connected to the authorization to sign for the company. Now this term has been left aside and the term right to represent the company has been taken into common use. Nowadays the Limited Liability Companies Act includes the assumption that the authorization to sign for the company is an essential part of the right to represent the company.

The board of directors has a general legal capacity to represent the company. Its individual members may not represent the company without a separate authorization. Further, it may be determined that the right to represent is vested in the members of the board of directors or the managing director on the basis of their position, or that the board of directors may grant such a right to an appointed person. A shareholder does not solely on the basis of his/her shareholding have the right to represent the company. Furthermore, it is not possible to stipulate in the articles of association that a shareholder would, by virtue of his/her status, have the right to represent the company.