The successive power of sub-attorney in companies.

In order to avoid legal problems and to ensure that the powers are exercised within the legal limits, so as to prevent refusal of registration in the Commercial Register and to provide legal certainty for both the company and the attorney-in-fact, it is essential that the power of attorney is expressly defined.

On 26 June 2024, the Dirección General de Seguridad Jurídica y Fe Pública (DGSJFP) issued a decision addressing a specific case on the powers of attorneys-in-fact to grant and revoke powers of attorney in a limited company.

The context of the case was that, in 2017, a limited company granted a general power of attorney to an attorney-in-fact, allowing him to grant and revoke powers of attorney within the established limits. In 2024, this attorney-in-fact used his power to grant a power of attorney to a third party, replicating the same power that had initially been granted to him. However, the Commercial Register refused to register this act on the basis of Articles 261 and 296 of the Commercial Code, which prohibit attorneys-in-fact from delegating powers of attorney without express authorisation.

The DGSJFP upheld the refusal of the Commercial Register, pointing out that the limited liability company had entrusted the power to grant powers of attorney solely to the original authorised agent. In order for the latter to be able to delegate this power to third parties, this possibility had to be clearly specified in the original power of attorney. The lack of such specification led to the dismissal of the company’s appeal.

In the commercial sphere, the law provides that the attorney-in-fact cannot delegate his powers without the express authorisation of the principal, according to Article 261 of the Commercial Code. In contrast, in the civil sphere, the attorney-in-fact may appoint a substitute unless explicitly prohibited. This difference is key to understanding the application of the rules in each case.

For companies, it is advisable to clearly define in the powers of attorney whether to allow delegation of powers. This protects the trust placed in the attorneys-in-fact and ensures that the powers granted are exercised in accordance with the will of the company.